Micron Technology Stock Surges 239% with Continued Growth Potential
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Should l Buy MU?
Source: Fool
- Strong Market Demand: Driven by applications such as data centers, smartphones, and personal computers, demand for memory chips is outpacing supply, leading to significant price increases; Gartner predicts a 47% rise in DRAM prices, which will directly boost Micron's revenue growth.
- Earnings Expectations Raised: Micron reported earnings of $8.29 per share in fiscal 2025, with projections indicating a more than 5-fold increase in earnings over the next two years, reflecting analysts' heightened confidence in its future growth.
- Valuation Advantage: Currently trading at a price-to-earnings ratio of 13, significantly lower than the Nasdaq-100 index, indicating that Micron's growth potential is not fully priced into its stock, suggesting further upside.
- Significant Price Potential: If Micron achieves earnings of $43.54 per share by the end of fiscal 2027, trading at a 20 times earnings multiple could see its stock price reach $871, nearly double its current price, highlighting strong growth prospects.
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Analyst Views on MU
Wall Street analysts forecast MU stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for MU is 336.12 USD with a low forecast of 235.00 USD and a high forecast of 500.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
26 Analyst Rating
24 Buy
2 Hold
0 Sell
Strong Buy
Current: 379.400
Low
235.00
Averages
336.12
High
500.00
Current: 379.400
Low
235.00
Averages
336.12
High
500.00
About MU
Micron Technology, Inc. provides memory and storage solutions. The Company delivers a portfolio of high-performance dynamic random-access memory (DRAM), NAND, and NOR memory and storage products through its Micron and Crucial brands. The Company's products enable advancing in artificial intelligence (AI) and compute-intensive applications. Its segments include Compute and Networking Business Unit (CNBU), Mobile Business Unit (MBU), Embedded Business Unit (EBU), and Storage Business Unit (SBU). CNBU segment includes memory products and solutions sold into the data center, PC, graphics, and networking markets. MBU segment includes memory and storage products sold into the smartphone and other mobile-device markets. EBU segment includes memory and storage products and solutions sold into the intelligent edge through the automotive, industrial, and consumer embedded markets. SBU segment includes SSDs and component-level storage solutions sold into the data center, PC, and consumer markets.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Micron Technology Stock Surges 239% with Continued Growth Potential
- Strong Market Demand: Driven by applications such as data centers, smartphones, and personal computers, demand for memory chips is outpacing supply, leading to significant price increases; Gartner predicts a 47% rise in DRAM prices, which will directly boost Micron's revenue growth.
- Earnings Expectations Raised: Micron reported earnings of $8.29 per share in fiscal 2025, with projections indicating a more than 5-fold increase in earnings over the next two years, reflecting analysts' heightened confidence in its future growth.
- Valuation Advantage: Currently trading at a price-to-earnings ratio of 13, significantly lower than the Nasdaq-100 index, indicating that Micron's growth potential is not fully priced into its stock, suggesting further upside.
- Significant Price Potential: If Micron achieves earnings of $43.54 per share by the end of fiscal 2027, trading at a 20 times earnings multiple could see its stock price reach $871, nearly double its current price, highlighting strong growth prospects.
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- Surging Market Demand: Micron Technology's memory chips have seen demand significantly outpace market supply, leading to a 261% stock price increase over the past six months, with a market cap nearing $500 billion, making it one of only 20 publicly traded companies worth this much.
- Gross Margin Improvement: In its first fiscal quarter, Micron's gross margin rose from 46% in the previous quarter to 57%, indicating the company's success in raising product prices amid a tight supply-demand environment, with expectations for this trend to continue, further enhancing its market competitiveness.
- Positive Industry Outlook: Management indicated in their earnings report that they expect supply-demand tightness to persist through 2026, suggesting that while future earnings may face cyclical fluctuations, strong market performance is likely to continue in the short term.
- Potential Competition from Alibaba: Despite Micron's strong performance, Alibaba's cloud computing business is growing rapidly, with analysts projecting a 40% increase in earnings per share next year, indicating that it could potentially surpass Micron's market cap in the future, highlighting the intense competition in the market.
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Micron Technology Stock Surges 239% with Continued Growth Potential
- Strong Market Demand: Driven by applications such as data centers, smartphones, and personal computers, demand for memory chips is outpacing supply, leading to significant price increases; Gartner predicts a 47% rise in DRAM prices, which will directly boost Micron's revenue growth.
- Earnings Expectations Raised: Micron reported earnings of $8.29 per share in fiscal 2025, with projections indicating a more than 5-fold increase in earnings over the next two years, reflecting analysts' heightened confidence in its future growth.
- Valuation Advantage: Currently trading at a price-to-earnings ratio of 13, significantly lower than the Nasdaq-100 index, indicating that Micron's growth potential is not fully priced into its stock, suggesting further upside.
- Significant Price Potential: If Micron achieves earnings of $43.54 per share by the end of fiscal 2027, trading at a 20 times earnings multiple could see its stock price reach $871, nearly double its current price, highlighting strong growth prospects.
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- Micron Technology Growth: Micron Technology reported a 57% year-over-year revenue increase to $13.6 billion in Q1 of fiscal 2026, with free cash flow surging 7,852%, indicating robust performance in the AI market, and plans to expand market share through new factory constructions.
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- Surging Market Demand: Micron Technology's memory chips have seen demand significantly outpace market supply, leading to a 261% stock price increase over the past six months, with a market cap nearing $500 billion, making it one of only 20 publicly traded companies worth this much.
- Gross Margin Improvement: In its first fiscal quarter, Micron's gross margin rose from 46% in the previous quarter to 57%, indicating the company's success in raising product prices amid a tight supply-demand environment, with expectations for this trend to continue, further enhancing its market competitiveness.
- Positive Industry Outlook: Management indicated in their earnings report that they expect supply-demand tightness to persist through 2026, suggesting that while future earnings may face cyclical fluctuations, strong market performance is likely to continue in the short term.
- Potential Competition from Alibaba: Despite Micron's strong performance, Alibaba's cloud computing business is growing rapidly, with analysts projecting a 40% increase in earnings per share next year, indicating that it could potentially surpass Micron's market cap in the future, highlighting the intense competition in the market.
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- Micron AI Demand Surge: Micron Technology achieved a 57% year-over-year revenue growth in Q1 FY2026, driven by strong demand for AI memory, with stock price up over 45% year-to-date, highlighting its leadership in the memory market.
- Duolingo User Engagement Boost: Duolingo reported a 41% revenue increase in Q3 2025, reaching 50 million daily active users, and despite a 24% stock price drop, a 34% growth in paid subscribers indicates the educational platform's ongoing appeal.
- Optimistic Market Outlook: Despite facing short-term challenges, the fundamentals of Robinhood, Micron, and Duolingo all indicate strong growth potential, suggesting that investors may consider positioning themselves at current price levels for long-term gains.
See More
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- Micron's Strong Performance: As of February 4, Micron's stock has risen 38% year-to-date and 338% over the past 12 months, indicating robust performance amid the AI boom, with expectations to benefit from a supercycle where demand for memory and storage chips exceeds supply.
- Broadcom's Growth Potential: Although Broadcom is down about 9.7% year-to-date, it has still gained 43.5% over the past 12 months and anticipates its AI revenue to double in the next quarter, showcasing strong growth potential in the AI market.
- Margin Comparison: Micron's gross margin stands at 45.53%, while Broadcom's is higher at 64.71%; however, as Broadcom shifts towards more AI revenue, its gross margin is expected to drop by 100 basis points, which could impact its stock performance.
- Valuation Advantage: Micron's price-to-earnings ratio is 39, significantly lower than Broadcom's 69, and its five-year PEG ratio of 0.73 indicates that Micron is undervalued relative to its long-term earnings potential, making it a more attractive investment option.
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- Bitcoin Price Crash: Bitcoin (^BTCUSD) is down more than 7% today, hitting a 1.25-year low and falling about 45% from its October record high, reflecting negative sentiment in the cryptocurrency market and a trend of capital outflows.
- Impact of Earnings Season: Despite 150 S&P 500 companies set to report earnings this week and 81% of the 237 companies that have reported exceeding expectations, market concerns over future economic data continue to suppress stock performance, with S&P earnings growth expected to reach 8.4% in Q4.
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