Key Takeaways
- Micron Technology’s stock has more than tripled in 2026, with a 228% increase as of the latest writing
- The company’s revenue and earnings are growing at outstanding rates due to a favorable demand-supply environment
- Strong memory demand and pricing are expected to be tailwinds for Micron in 2026
- The company’s guidance suggests a significant jump in revenue and earnings in the current fiscal year
- Consensus estimates anticipate Micron’s earnings to jump by 284% to $31.88 per share in the current fiscal year
Introduction to Micron’s Stock Performance
Micron Technology’s stock has been on a tear in 2026, with a staggering 228% increase as of the latest writing. This surge is not surprising, given the company’s outstanding revenue and earnings growth, driven by a favorable demand-supply environment. The memory specialist’s latest fiscal quarter results, released on December 17, have given the stock a significant boost, setting it up for a solid start to the new year. However, the question remains whether Micron can sustain its momentum throughout 2026. To answer this, it’s essential to delve into the company’s prospects and explore the potential upside it could deliver in the coming year.
Strong Memory Demand and Pricing
Micron has started its latest fiscal year on a solid note, with revenue shooting up 57% year over year to $13.6 billion in the previous quarter. The favorable pricing environment in memory chips led to a 7.5 percentage point increase in non-GAAP operating margin to 35%. As a result, Micron’s adjusted earnings soared by 167% to $4.78 per share. The company’s guidance suggests that this phenomenal growth is unlikely to slow down in the current fiscal year, with a projected 132% year-over-year jump in revenue to $18.7 billion in the current quarter. Non-GAAP earnings are expected to soar by 440% to $8.42 per share in the current quarter. The booming demand for artificial intelligence (AI) accelerators deployed in data centers has led to a sharp increase in server memory demand, resulting in a memory chip shortage and inflated prices.
Memory Market Dynamics
The memory market’s dynamics are working in Micron’s favor, with a shortage of memory chips driving up prices. Market research firm Counterpoint Research estimates that the price of server memory used in data centers to accelerate AI workloads could double by the end of 2026. Similarly, the shortage is likely to drive up the price of memory chips used in smartphones and personal computers (PCs) as well in the new year. While Micron and other memory manufacturers are looking to boost production capacity to meet the surging demand, the company’s CEO, Sanjay Mehrotra, acknowledges that supply will remain short in the medium term, with the company only able to meet about 50% to two-thirds of demand from key customers.
Investment Potential
Consensus estimates anticipate Micron’s earnings in the current fiscal year to jump by 284% to $31.88 per share. Assuming the company’s bottom-line growth rate slows to 100% in the first quarter of fiscal 2027, its total earnings for the next four quarters could land at $36.66 per share. Multiplying the estimated earnings after a year with the tech-laden Nasdaq-100 index’s forward earnings multiple of 25 suggests that Micron could be trading at $916 after a year, more than triple its current stock price. This makes Micron an attractive investment opportunity, with its current price of 25 times earnings considered extremely attractive given its rapid growth rate. As such, investors should consider buying Micron while it is still trading at a relatively low multiple, potentially leading to significant gains in the new year.
Conclusion
In conclusion, Micron Technology’s stock has been on a remarkable run in 2026, driven by a favorable demand-supply environment and strong memory demand and pricing. The company’s guidance and consensus estimates suggest that this growth is unlikely to slow down in the current fiscal year, with potential upside in the coming year. With its attractive valuation and rapid growth rate, Micron is an investment opportunity worth considering, potentially leading to significant gains for investors in the new year. As the memory market continues to evolve, driven by the increasing demand for AI accelerators and other applications, Micron is well-positioned to capitalize on these trends and deliver strong returns for investors.