TLDR
- Shares of Micron (MU) have skyrocketed approximately 300% from the low-$60s to roughly $430 over the last year, yet the forward P/E ratio remains at just 12.4 — about 46% under the sector median.
- Analyst projections call for Micron’s fiscal 2026 revenue to reach $76 billion, representing a 103% year-over-year increase, while EPS is anticipated to multiply fourfold to $33.92.
- High-bandwidth memory (HBM) production capacity is completely sold out through 2026, leaving some cloud giants with only half their required memory allocation.
- The company’s Cloud Memory Business Unit achieved approximately 66% gross margins in fiscal Q1 2026, while overall corporate margins are guided toward ~68% in Q2.
- Should Micron’s multiple expand to match industry peers, analysts believe shares could climb into the mid-$600s to low-$700s territory.
Micron Technology has accomplished something remarkable in the equity markets: its share price tripled while the stock actually became more attractive from a valuation perspective.
During the trailing twelve-month period, MU shares have appreciated from approximately $60 to around $430. That represents roughly a 300% appreciation. Despite this enormous rally, the forward non-GAAP P/E multiple has contracted to approximately 12.4 — about half the sector’s median — because earnings projections have accelerated even more dramatically than the share price.
The PEG ratio reinforces this narrative. Currently trading around 0.21, compared to a sector median approaching 1.5, the market appears to be discounting the sustainability of Micron’s expansion trajectory.
Analysts on Wall Street see things differently, at least in the near term. Revenue projections for fiscal 2026 stand at $76 billion, representing more than a doubling from the previous fiscal year. EPS estimates are expected to surge from $7.59 in fiscal 2025 to $33.92 in the current year — nearly a fourfold increase. Notably, all 28 analyst estimate revisions over the past 90 days have been in an upward direction.
For the second quarter of fiscal 2026, consensus estimates hover around $18.7–$18.9 billion in revenue, approximately 135% higher than the comparable quarter from last year, accompanied by non-GAAP EPS near $8.50 — translating to 445% year-over-year growth.
Supply Is the Constraint, Not Demand
The supply-demand dynamic is crystal clear. HBM capacity has been entirely allocated through 2026 under fixed price and volume agreements. DDR5 spot market prices have climbed approximately 30% year-to-date, while DRAM and NAND contract pricing has increased another 30% in early 2026.
Certain cloud hyperscalers are reportedly securing only 50% to 67% of their desired memory allocation. This environment provides Micron with substantial pricing leverage and the flexibility to prioritize allocation toward its most profitable customers.
The total addressable market for HBM alone stood at $35 billion in 2025 and is projected to expand at a 40% compound annual growth rate through 2028, positioning it to approach $100 billion by decade’s end.
Micron’s Cloud Memory Business Unit — encompassing HBM and premium data-center DRAM products — delivered gross margins of approximately 66% during Q1 fiscal 2026. Overall corporate gross margin reached 56.8% in Q1, with management guidance pointing to roughly 68% for Q2, representing an 11-percentage-point sequential improvement.
Free cash flow margin reached nearly 30% in Q1 — establishing a new company record. During the same quarter, Micron retired approximately $2.7 billion in debt obligations and executed around $300 million in share buybacks.
Long-Term Capacity Build
Micron has committed to investing approximately $200 billion in US-based and allied nation manufacturing infrastructure over the long term, which includes a projected $100 billion mega-fab complex planned for New York State. Additionally, the company is constructing a $24 billion silicon-wafer fabrication facility in Singapore and acquiring DRAM manufacturing assets in Taiwan from Powerchip Semiconductor for roughly $1.8 billion.
These capital expenditures are partially subsidized by up to $6.1 billion in CHIPS Act grants and a 25% advanced manufacturing investment tax credit.
From a valuation standpoint, if Micron were to trade at a forward P/E of 20 — still materially below the Nasdaq-100 average of 24.5 — the implied share price would approach $660. Applying peer-group median EV/Sales and EV/EBITDA multiples, the blended valuation suggests potential upside into the low-$700s range.
The current consensus Street price target clusters around $390, a level MU shares have already exceeded.
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