Key Takeaways
- Micron Technology’s stock has risen 247% in the past year and is poised for further growth due to improving memory prices.
- The company’s guidance for the ongoing second quarter of fiscal 2026 anticipates non-GAAP earnings to jump by 440% year over year.
- Micron’s high-bandwidth memory (HBM) chips are sold out for 2026, and the company is negotiating multi-year contracts with key customers for both DRAM and NAND flash storage chips.
- Consensus estimates project Micron’s earnings to land at $32.22 per share in the current fiscal year, with the potential for the stock to triple in 2026.
Introduction to Micron Technology’s Growth
Micron Technology’s stock has experienced a significant surge in the past year, rising an impressive 247% as of this writing. The memory specialist started 2026 on a strong note, jumping over 10.5% on January 2. This growth can be attributed to positive analyst coverage, with Bernstein SocGen Group analyst Mark Li increasing his Micron price target to $330 from $270 and rating the stock as "outperform." Li’s upgrade is based on the favorable demand-supply dynamics in the memory market, with prices of memory chips such as dynamic random-access memory (DRAM) and NAND flash storage rising in recent quarters.
Positive Analyst Coverage
The positive analyst coverage from Mark Li is a significant factor contributing to Micron’s growth. Li’s upgrade is based on the expectation of a 20% to 25% sequential jump in the price of DRAM in the current quarter. This increase in price is due to the supply shortage of memory chips, which has led to a spike in prices. Manufacturers like Micron have been unable to produce enough chips to meet the end-market demand from data centers, which require huge amounts of compute and storage memory to process AI workloads. Li’s forecast suggests that Micron could sustain terrific bottom-line growth going forward, making it an attractive investment opportunity.
Micron’s Guidance and Outlook
Micron’s guidance for the ongoing second quarter of fiscal 2026 is highly optimistic, with the company anticipating non-GAAP earnings to jump by a whopping 440% year over year to $8.42 per share. This significant increase in earnings is a result of the favorable demand-supply dynamics in the memory market. Micron’s CEO, Sanjay Mehrotra, has also confirmed that the company’s HBM chips are sold out for 2026, and negotiations with customers have been completed for volume and pricing. Additionally, Micron is negotiating multi-year contracts with several key customers for both DRAM and NAND flash storage chips, which could ensure terrific bottom-line growth in the coming years.
Growth Potential
Consensus estimates project Micron’s earnings to land at $32.22 per share in the current fiscal year, which is an increase of almost 4 times from the previous year. Assuming this growth rate continues, Micron’s stock could potentially triple in 2026. The company’s fiscal 2027 earnings estimate stands at $39.39 per share, which suggests that its bottom line could land at $37.29 per share over the next four quarters. Multiplying the projected earnings by the tech-laden Nasdaq-100 index’s forward earnings multiple of 26 points toward a stock price of $969 by the end of the year, which is just over triple its current stock price.
Investment Opportunities
Micron Technology’s stock is currently trading at just 9 times forward earnings, making it an attractive investment opportunity for those looking to buy a top AI stock at a cheap valuation. The company’s remarkable earnings growth and potential for further growth make it a solid investment choice. Investors looking to capitalize on the growing demand for memory chips and AI technology should take a closer look at Micron before its stock price jumps. With its strong guidance and outlook, Micron Technology is poised to deliver phenomenal gains to investors in the new year.