Key Takeaways:
- Micron Technology, Inc. (NASDAQ: MU) has reported record fiscal Q1 2026 results and guided to a strong February quarter, driven by high-bandwidth memory (HBM) demand and tight DRAM/NAND supply.
- The company is experiencing a "memory supercycle" with surging pricing, tight supply, and a strategic product (HBM) that is in high demand.
- Micron’s guidance for the February quarter is strong, with revenue expected to be $18.70B, gross margin expected to be 67%, and diluted EPS expected to be $8.19.
- The company is increasing its fiscal 2026 capital expenditure plans to approximately $20B to support HBM supply capability and its 1-gamma DRAM transition.
- Analysts have raised their price targets for Micron stock, with some reaching as high as $500.
Introduction to Micron’s Momentum
Micron Technology, Inc. (NASDAQ: MU) is heading into the final full week of 2025 with fresh momentum, driven by a blockbuster fiscal first-quarter report and an even louder outlook for the February quarter. The company’s stock closed at $265.92 on the latest available tape, capping a sharp, AI-fueled run that has put memory chips back at the center of the semiconductor narrative. The immediate catalyst for this momentum is simple: Micron just printed record results and guided to another step-change higher. The deeper catalyst is more structural—and more controversial. Management and multiple analysts are increasingly framing the current environment as a supply-constrained “memory supercycle,” driven by high-bandwidth memory (HBM) demand from AI data centers, tight DRAM/NAND supply, and a capital discipline mood that hasn’t always existed in memory.
Micron’s Earnings and Guidance
Micron’s fiscal Q1 2026 results delivered record revenue of $13.64 billion, with GAAP EPS of $4.60 and non-GAAP EPS of $4.78. The company’s guidance for the February quarter is strong, with revenue expected to be $18.70B, gross margin expected to be 67%, and diluted EPS expected to be $8.19. This guidance is a key factor in Micron’s momentum, as it suggests that the company is experiencing a significant increase in demand for its products, particularly HBM. Micron’s investor materials and earnings commentary added two particularly market-moving points: the company has completed agreements on price and volume for its entire calendar 2026 HBM supply, and the HBM total addressable market (TAM) is expected to grow ~40% CAGR through 2028.
The HBM Story
HBM—high-bandwidth memory—is becoming the most strategic (and profitable) slice of the memory market because it’s essential for training and running large AI models. Micron is one of only three major suppliers, alongside SK Hynix and Samsung. The company’s HBM supply is fully covered by agreements for 2026, and the HBM TAM is expected to grow significantly over the next few years. This growth is driven by the increasing demand for AI and machine learning applications, which require high-bandwidth memory to function effectively. As a result, Micron is well-positioned to benefit from this trend, with its HBM products expected to play a critical role in the development of AI and machine learning applications.
Supply Constraints and Capital Expenditure
One of the most important Micron stock headlines this week is management’s repeated claim that tight memory conditions could last longer than many investors assume. The company expects these conditions to persist beyond calendar 2026, driven by sustained demand and supply constraints. To address these constraints, Micron is increasing its fiscal 2026 capital expenditure plans to approximately $20B, primarily to support HBM supply capability and its 1-gamma DRAM transition. The company’s supply expansion timeline includes pulling forward its first Idaho fab timeline and breaking ground on its first New York fab in early calendar 2026. This increased capital expenditure is a key factor in Micron’s ability to meet the growing demand for its products, particularly HBM.
Crucial Exit and Portfolio Focus
Micron is exiting the Crucial consumer business, which has historically sold SSDs and memory products directly to consumers. The company will stop selling Crucial consumer-branded products through major retailers/e-tailers/distributors, while continuing shipments through the consumer channel until the end of fiscal Q2 (February 2026). This move is a signal that Micron believes the highest-return use of its constrained manufacturing capacity is HBM and enterprise/data center, not price-sensitive consumer products. The company is prioritizing strategic segments and focusing on high-margin products, which is expected to drive growth and profitability in the long term.
Analyst Sentiment and Price Targets
Analyst sentiment has turned sharply more aggressive following earnings and guidance. The "base bull case" cluster has price targets around $300, while the "AI bellwether" cluster has targets around $350. The outlier is Rosenblatt’s Kevin Cassidy, who raised his Micron price target to a Street-high $500. These price targets reflect the growing optimism around Micron’s prospects, driven by the company’s strong earnings and guidance, as well as the increasing demand for HBM and other memory products.
Conclusion and Outlook
Micron stock is entering 2026 with a rare combination for a memory name: surging pricing, tight supply, and a product (HBM) that looks more like strategic infrastructure than a commodity component. The company’s Q1 results and Q2 guidance reset expectations, management is forecasting tight conditions beyond 2026, and Wall Street’s price targets have marched sharply higher. However, the memory industry is inherently cyclical, and any combination of demand pauses, rapid capacity adds, or macro shocks can compress pricing and margins. As a result, investors should approach Micron stock with caution, taking into account the potential risks and challenges that the company may face in the future.
