The fantastic results might be unsustainable, but investors can celebrate while it lasts.
*Stock prices used were the afternoon prices of June 25, 2026. The video was published on June 27, 2026.
Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
Micron Technology delivered another blockbuster quarterly report last week, underscoring why the memory-chip maker has become one of the biggest beneficiaries of the AI spending boom.
Micron Technology MU shares fell on Monday after South Korea unveiled plans for a massive new semiconductor investment program.
Shares of Micron were down about 1% at $1,117.19 after declining 6.7% on Friday.
The pullback came as South Korea's industry minister said Samsung Electronics and SK Hynix plan to spend a combined 800 trillion won, or approximately $518.6 billion, to develop new semiconductor manufacturing hubs in the country's southwest region.
The announcement underscores the intensifying race among the world's leading memory-chip producers to capture a larger share of the booming artificial intelligence market.
Micron, Samsung, and SK Hynix are the dominant suppliers of high-bandwidth memory (HBM) chips, a critical component used in advanced artificial intelligence systems developed by companies such as Nvidia.
Investors initially appeared concerned that the massive spending commitments could eventually increase competition in the sector.
However, the long-term impact may be limited in the near future. Large semiconductor fabrication facilities typically require years to construct and ramp into production.
Micron's own $100 billion semiconductor manufacturing project in New York, announced in 2022, is not expected to begin production until 2030.
The selloff also comes despite Micron recently delivering one of its strongest earnings reports on record as demand for AI-related memory products continues to accelerate.
Last week, the company reported fiscal third-quarter revenue of $41.46 billion, more than four times higher than the $9.3 billion generated in the same period a year earlier.
Revenue exceeded analyst expectations of nearly $36 billion, according to LSEG consensus estimates.
Management also provided a strong outlook, forecasting revenue of approximately $50 billion for the current quarter, compared with $11.3 billion during the same quarter last year.
The results reinforced investor confidence that supply constraints and growing AI infrastructure spending continue to support pricing across the memory market.
Following the earnings report, several Wall Street analysts raised their forecasts for Micron shares.
Among the most bullish was Barclays analyst Thomas O'Malley, who increased his price target by 70% to $2,000 from $1,175 while maintaining a Buy rating.
The revised target was based on a higher earnings outlook for fiscal 2027.
O'Malley raised his fiscal 2027 earnings-per-share estimate to $166.74 from $106.77 previously.
A key factor behind the upgrade was Micron's expanding use of supply agreements, or SCAs.
According to O'Malley, Micron disclosed stronger-than-expected details about these agreements, including both customer participation and revenue commitments.
The analyst said Micron has signed agreements with 16 customers across data center, consumer, and automotive markets, including four large customers and three medium-sized customers.
Most agreements run for five years between 2026 and 2030, while automotive contracts generally span three years.
O'Malley noted that the agreements typically include fixed pricing or pricing ranges, while still allowing for higher pricing on new product launches.
Currently, the signed agreements represent roughly 20% of Micron's DRAM volume and approximately 33% of NAND volume.
Micron expects more than half of its future revenue to eventually come from these agreements once the program is fully implemented.
According to O'Malley, 14 of the 16 signed agreements carry cumulative minimum revenue commitments totaling approximately $100 billion over their duration, with the potential for additional upside if industry supply remains constrained.
The analyst argued that the agreements provide meaningful downside protection while preserving exposure to further gains from continued AI-driven demand and favorable memory pricing conditions.
Micron (MU 0.05%) stock slipped 2% through 12:35 p.m. ET Monday as even more worries about the durability of demand for DRAM and NAND computer memory surfaced.
Perennial Micron bull Jordan Klein at Mizuho is doing his best to contain the damage with a note in support of Micron today... but it seems to be having limited effect.
Image source: Micron.
What's worrying Micron investors today Over the weekend, we learned Apple (AAPL 0.53%) is petitioning the U.S. government for permission to skip purchases of overpriced Micron and Sandisk (SNDK 3.62%) memory chips, and buy from Chinese supplier CXMT instead.
CXMT primarily makes DRAM, not NAND flash, so this is really only a threat to half of Micron's business -- but it's an important half, as HBM DRAM demand is the primary driver behind Micron's profit margins right now. Worse, if Apple's just the tip of the iceberg, and other memory buyers begin begging for permission not just to buy cheaper chips, but to have a chance to buy any chips at all, wherever they come from -- then the pricing power that Micron gets from limited memory supplies could begin to evaporate.
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Should you worry? So how big a threat is this, really?
Well, Mizuho analyst Jordan Klein points out that "DRAM and NAND supply is way below true end demand" right now -- with China or without it. And buyers may have to go without it, because (a) there's no guarantee the U.S. government will permit Apple to buy DRAM from CXMT, and (b) there's no guarantee China would permit it, either, as it struggles to produce enough DRAM for its own artificial intelligence ambitions!
Meanwhile, DigiTimes reports buyers may have to pay 2.5 times 2026 prices to secure DRAM in 2027. The boom times for Micron, I suspect, won't end anytime soon.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Micron Technology. The Motley Fool has a disclosure policy.
Shares of Micron Technology (MU 0.06%) have shot up by a staggering 259% in 2026, as of this writing, and it looks like its red-hot rally isn't going to end any time soon.
The latest catalyst for Micron stock came when it released its fiscal 2026 third-quarter results (for the three months ended May 28) on June 24. The company's revenue and earnings blew past Wall Street's expectations, and its guidance for the current quarter was also well ahead of what analysts were looking for.
Let's take a closer look at Micron's performance and check why this high-flying artificial intelligence (AI) stock has the potential to jump by over 3x in a year.
Image source: Micron Technology.
The memory boom powering Micron Technology's phenomenal growth is getting stronger Micron's revenue in fiscal Q3 shot up by almost 4.5x year over year to $41.5 billion, miles ahead of the $35.1 billion consensus estimate. Even better, its earnings per share jumped by 13x year over year to $25.11, again crushing the consensus estimate of $20.39 per share.
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The phenomenal demand for memory and storage chips used in AI accelerators and data centers, and ongoing supply constraints, propelled Micron's non-GAAP gross margin to 84.9% last quarter, up from 39% in the year-ago period. The company anticipates its gross margin to rise further in the current quarter to 86%.
What's more, the midpoint of Micron's revenue guidance of $50 billion points toward another year-over-year increase of 4x in its top line. Meanwhile, its earnings per share are on track to increase by just over 10x to $31.00, according to the midpoint of the guidance range. An important point from Micron's latest earnings call was that customers are entering into long-term contracts with the company to secure memory supply.
Micron signed 16 strategic customer agreements (SCAs) in fiscal Q3. The company notes that 14 of these SCAs represent a minimum contracted revenue of $100 billion over the remainder of the contract. Additionally, Micron has structured these SCAs as "take-or-pay agreements, with binding commitments to purchase specific volumes over this multi-year term." So, the buyers will either have to purchase a minimum quantity of memory chips from Micron over the contract term or pay a fee anyway.
These agreements clearly suggest that Micron has finally escaped the boom-and-bust memory cycles that have impacted it in the past. The memory industry is known to be cyclical, with demand dropping during periods of weak smartphone and personal computer (PC) sales, creating an oversupply. This has led to a sharp decline in memory prices in the past.
However, the advent of AI has brought about a structural change in the industry. AI accelerators and edge devices, such as smartphones and PCs, need more compute and storage memory to execute AI workloads. Specifically, the high-bandwidth memory (HBM) used in AI accelerator chips uses up thrice the wafer capacity of traditional memory.
As AI data centers are cornering a major share of the dynamic random-access memory (DRAM) supply, there is a severe shortage of memory chips that's expected to last until 2030, at least. So, the favorable demand-supply dynamics powering Micron's growth aren't going away anytime soon, as evident from the scramble by its customers to secure long-term supply.
The latest earnings forecasts suggest that this high-flying stock has room to multiply Analysts have significantly increased Micron's earnings forecasts following its latest quarterly report.
Data by YCharts
The company delivered just $8.29 in earnings per share in fiscal 2025. The forecast for fiscal 2027, as shown in the chart above, indicates a potential 18x increase in the company's earnings in just two years. Micron could indeed hit that mark, considering the memory industry's revenue is on track to grow substantially once again next year.
The concurrent supply shortage, meanwhile, will be a tailwind for Micron's margins and bottom line. So, if Micron's earnings per share jump to $149.40 in fiscal 2027 and it trades at 26.3 times earnings at that time (in line with the tech-laden Nasdaq-100 index's forward earnings multiple), its stock price could reach $3,929.
That's 3.4x Micron's current stock price, which is why investors should consider buying this growth stock hand over fist, especially given that it trades at just 7.3 times forward earnings.
Micron Technology (MU) stock is in focus after Phillip Securities raised its price target on the memory-chip maker, citing continued strength in DRAM and NAND m
Dave Mazza and Ryan Shrout discuss their biggest takeaways from Micron's (MU) earnings and what it means for memory stocks moving forward. Dave explains why ongoing supply constraint margins will be higher than average moving forward while Ryan talks about his outlook for memory stocks beyond Micron.
Micron Technology's monster post-earnings rally is almost gone.
Shares of the maker of memory chips traded as low as $1,023.65 on Monday, down 18% from the 52-week high reached on Thursday. Monday's session low is also nearly $25 below the stock's closing level on Wednesday before Micron reported fiscal third-quarter revenues that blew past analyst expectations.
The sharp about-face has spurred some dip-buying among options traders in Micron, but flows across the sector are sharply divided depending on the stock or ETF.
Micron Technology shares in the past five trading sessions
In Micron, call volume outpaced puts but more calls were likely sold than bought, according to data from ThinkOrSwim. Of the $2.2 billion in premium traded by midday Monday, $1.6 billion was tied to calls, with seven of the top 10 contracts by volume calls, and all expiring Thursday, SpotGamma data show.
The VanEck Semiconductor ETF (SMH) added about 3% on Monday — despite Micron's dip — as Seagate Technology and Western Digital added 8% and 10%, respectively. The latter two stocks rose following a bullish initiation by Melius Research that said both could rally roughly 60% from current prices.
Call volume was almost double puts across Seagate and Western Digital, though the two traded less than 40,000 options in total. In Western Digital, where about 27,000 contracts traded, 3,000 calls were bought compared to just 1,000 puts. The most popular contract by volume was the 700-strike call expiring Thursday, an $8.50 trade that needs a 10% rally to pay off.
Flows in the SMH ETF skewed notably bearish – which they have for much of this summer – with put volume more than three times higher than calls. Traders bought almost 11,000 puts, compared to just 3,500 calls.
Volatility in the SMH is about 60, arguably making it a preferable vehicle for hedging compared to single stocks, where implied volatility is still the highest in the market. The most popular contract in SMH is the 560-strike put expiring Aug. 21.
Bulls are still showing a preference for the Roundhill Memory ETF (DRAM), where almost 300,000 contracts traded, and more than twice as many calls were bought than puts. Still, even the euphoria here may be fading some, with more calls sold than bought.
One bullish trader in DRAM collected over $3 million selling 2,200 of the 80-strike puts expiring Dec. 18 for $5.2 million and buying almost 3,000 of the 40-strike puts expiring June 2027 for $2 million.
As Micron Technology Inc. (NASDAQ: MU) shares ride the Artificial Intelligence (AI) boom, C J Muse, an analyst at Cantor Fitzgerald, has signaled further bullishness on Micron stock over the next 12 months.
On June 29, Muse reiterated a ‘Buy’ rating for Micron stock, according to a note shared with clients analyzed by Finbold. Muse raised the 12-month price target for Micron Technology stock from $1,500 to $2,000, thus a potential 65.15% upside from press time.
On June 28, Yik Ban Chong, an analyst at Phillip Securities, reiterated a ‘Buy’ rating on the stock. Chong increased Micron Technology’s 12-month price target from $530 to $1,870, implying a 76.63% upside.
The analyst expects the industry memory shortage to persist beyond 2027. As such, Chong believes this could enable Micron Technology to secure additional agreements with both existing and new customers in the coming quarters.
What’s the average Micron stock price target from Wall Street analysts? At the time of reporting, MU stock has received an average rating of ‘Strong Buy’ from 30 Wall Street analysts over the past 30 days, based on data from TipRanks. As such, Wall Street analysts have set an average target price of $1,556 for Micron Technology stock over the next 12 months.
MU stock price forecast. Source: TipRanks The highest MU stock price forecast was about $2,200, while the lowest prediction was at approximately $1,100.
MU stock price outlook The company’s stock market has rallied more than 296% year to date (YTD), currently trading at around $1,132.33 at the time of reporting.
Micron Technology stock chart YTD. Source: Finbold As a result, MU stock valuation was at roughly $1.3 trillion at the time of publication. With Wall Street analysts anticipating a further upsurge over the next 12 months, Micron stock valuation could rise significantly.
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Micron Technology (NASDAQ: MU | MU Price Prediction) and Apple (NASDAQ: AAPL) just reported earnings that expose who holds the AI era’s supply chain leverage. Micron posted a record fiscal Q3 with an 84.9% non-GAAP gross margin. Apple delivered its best March quarter ever at $111.184 billion while flagging reliance on third parties for components as a core risk.
HBM Inhales Wafers. iPhone 17 Carries Cupertino. Micron’s quarter was a memory squeeze made visible. Revenue hit $41.456 billion, up 345.72% year over year, with DRAM prices up in the low-60s% range. CEO Sanjay Mehrotra told investors “DRAM and NAND industry demand continues to significantly exceed industry supply” and that tightness extends beyond calendar 2027. HBM4 is already in volume, with over $1 billion in HBM4 revenue shipped.
Apple leaned on the consumer franchise. iPhone revenue reached $56.994 billion, Services hit an all-time high at $30.976 billion, and Tim Cook credited “extraordinary demand for the iPhone 17 lineup“. Gross margin landed at 46.9%, healthy for hardware but a fraction of Micron’s number.
Floor Pricing vs. Sticker Shock The real story sits in Micron’s contracts. Mehrotra disclosed 16 Strategic Customer Agreements covering roughly 20% of DRAM volume and one-third of NAND volume, with RPO of approximately $100 billion. Crucially, “gross margins at the floor will be well beyond the peaks we experienced in prior cycles.” That is a polite way of saying customers signed away the downside.
Apple sits on the receiving end. According to industry context, Cupertino has been pressured to accept higher memory prices to defend hardware margins from the memory tax. The buyback machine is enormous, with a fresh $100 billion buyback authorization, yet the input costs still flow through Boise.
Lens Micron Apple Gross Margin 84.9% 46.9% Core Bet HBM4 and SCA lock-ins iPhone 17 and Services Key Vulnerability Lead-customer concentration Consumer sticker shock The iPhone 18 Cycle Will Test Both Polymarket pegs 96.2% odds on an iPhone 18 launch in 2026, meaning Apple’s next mass build hits during the tightest memory window in years. I will be watching whether Micron’s Q4 revenue guide of $50.0B and EPS of $31.00 holds as hyperscaler order books refresh, and whether Apple’s Services moat can mask hardware margin compression once consumers see the new price tags.
Why the Supplier Looks Structurally Advantaged, With Caveats For exposure to the side dictating terms in this cycle, Micron looks structurally advantaged right now. The $100 billion RPO floor and forward P/E near 7x tell me the cash flow is not fully priced in yet, even after a 296.92% year-to-date move. Apple offers a steadier profile: a $100 billion buyback and Services growth cushion the input shock. Both names carry downside risk if hyperscaler capex blinks. Memory cycles always end. This one just has unusually strong contractual scaffolding.
As of the end of last week, shares of Micron Technology (MU 1.59%) were up close to 300% since the beginning of the year. It has been among the hottest stocks to own. But what may surprise you is that despite such impressive gains, it's still not the best-performing stock on the S&P 500.
The one S&P 500 stock that's been outperforming Micron this year is Sandisk (SNDK 4.26%). Its gains of over 780% have dwarfed Micron's performance. It's also a big name in the memory market, and so it may not be all that surprising that it's been doing well given the ongoing supply shortages. The big question, however, is whether it can still go higher.
Image source: Getty Images.
Sandisk's seemingly modest valuation may have been attracting more investors Although Sandisk's stock is up a staggering amount this year, with a market cap of around $300 billion, it's nowhere near what Micron is worth right now (close to $1.2 trillion). For growth investors, that could make the memory stock a more appealing buy, with the hope that it might have more room to rise higher in the long run.
Ironically, however, in terms of earnings, Sandisk is the more expensive stock to own. Based on analyst expectations, it's trading at a forward price-to-earnings (P/E) multiple of 32 while Micron trades at a multiple of just seven. The S&P 500, meanwhile, averages a forward P/E multiple of 21. When based on earnings, there's a stronger case to be made for Micron to rally higher than there is for Sandisk.
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Is Sandisk stock still worth buying? Sandisk's stock has been red hot, and its financial performance has also been impressive. Revenue was up 251% in the quarter ending April 3, totaling just under $6 billion. And its bottom line flipped from a loss of $1.9 billion a year ago to a profit of more than $3.6 billion this past quarter. Demand for its flash memory products remains high, as is evident in its guidance for the current quarter, which calls for revenue of up to $8.3 billion and for gross margin to be up around 81%.
Sandisk's stock may still rise higher due to its strong results, but with its valuation ballooning and becoming much more significant of late, its returns from here on out may be more limited. Ultimately, I think there are many cheaper and better tech stocks to consider instead of Sandisk.
David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool has a disclosure policy.
Key Takeaways Micron's data center revenues topped $25B in Q3 FY26, led by robust AI-driven demand.Micron is expanding AI memory products, including HBM4, HBM4E, DDR5 RDIMMs and PCIe Gen6 SSDs.Micron has 16 multi-year customer agreements that improve long-term data center revenue visibility. Micron Technology's (MU - Free Report) booming data center business has become its biggest growth driver, positioning the company to benefit from sustained AI infrastructure investments. In third-quarter fiscal 2026, the company's data center revenues exceeded $25 billion, representing an annualized run rate of more than $100 billion, while data center SSD revenues more than doubled sequentially. Management attributed this momentum to robust AI-driven demand, with hyperscalers requiring greater memory bandwidth and capacity for increasingly complex AI workloads. The company expects DRAM and NAND demand to continue outpacing industry supply beyond 2027, supporting favorable pricing and revenue growth.
Micron is further strengthening its position through advanced AI memory products, including HBM4, HBM4E, high-capacity DDR5 RDIMMs and next-generation PCIe Gen6 SSDs, enabling it to capture higher-value opportunities across AI servers and cloud infrastructure. The company is also benefiting from 16 multi-year Strategic Customer Agreements, which provide committed supply arrangements and improve long-term revenue visibility from leading data center customers.
Beyond the quarterly results, Micron reinforced its AI data center strategy during COMPUTEX 2026 by expanding its end-to-end AI memory and storage portfolio, and its recent strategic collaboration in June 2026 with Anthropic further strengthens its role in next-generation AI infrastructure. With AI adoption accelerating across cloud computing, enterprise applications and emerging inference workloads, Micron appears well-positioned to sustain strong data center growth.
Continued product leadership, expanding customer commitments and structural industry supply constraints could provide additional upside for the company's revenues over the coming years, supporting the Zacks Consensus Estimate for annual revenue growth of 224.96% in fiscal 2026 and 83.21% in fiscal 2027.
How Micron Is Tackling AI Data Center CompetitionNVIDIA (NVDA - Free Report) holds a broader competitive advantage through its full-stack AI platform spanning GPUs, networking, software and systems. NVIDIA emphasizes integrated AI infrastructure and ecosystem expansion, while Micron supplies critical HBM memory. NVIDIA benefits from larger AI infrastructure opportunities, stronger platform lock-in and superior ecosystem scale.
Compared with Micron’s memory-centric AI strategy, Marvell Technology (MRVL - Free Report) competes through custom AI silicon, networking and optical interconnects for hyperscale data centers. Marvell Technology prioritizes cloud infrastructure partnerships and connectivity solutions, complementing Micron’s HBM offerings. Marvell Technology gains strength from custom chip design, networking expertise, and expanding AI infrastructure demand.
MU’s Share Price Performance, Valuation & EstimatesMicron shares have surged 286.9% in the past six-month period, outperforming the Zacks Computer-Integrated Systems industry’s 129.3% rally and the broader Computer and Technology sector’s return of 11.8%.
MU’s Six-Month Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, MU trades at a forward price/sales (P/S) ratio of 6.24x, slightly lower than the sector’s average of 6.35x. The company carries a Value Score of F.
MU Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Micron’s earnings per share is pegged at $64.26 for fiscal 2026 and $124.34 for fiscal 2027. These projections imply year-over-year growth of 675.15% for fiscal 2026 and 93.49% for fiscal 2027 and have been revised upward over the past 30 days for both fiscal years.
Image Source: Zacks Investment Research
Micron currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Micron reported $41.46 billion in revenue, nearly 85% gross margin, and record cash flow, while guidance significantly exceeded Wall Street expectations. 16 take-or-pay agreements through 2030 secured $22 billion of customer commitments, fundamentally improving revenue visibility and pricing stability. AI demand now exceeds available memory supply through at least 2028, with HBM, enterprise SSDs, and agentic AI driving structural shortages.
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
The analysis is provided exclusively for informational purposes and should not be considered professional investment advice. Before investing, please conduct personal in-depth research and utmost due diligence, as there are many risks associated with the trade, including capital loss.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Three times the current price would put Micron Technology (NASDAQ:MU | MU Price Prediction) somewhere around $3,000 a share. That is a number that sits above every published Wall Street target on the stock. The only way there runs through a memory supercycle that lasts longer and runs hotter than even bulls currently model. Let’s take a look at how Micron could get there, even though Goldman Sachs has a sharp counter to the whole exercise.
The June quarter that re-rated DRAM and HBM Micron’s fiscal third quarter, reported June 24, forced analysts to redraw their spreadsheets. Revenue came in at $41.456 billion, up 345.72% year over year from $9.30 billion. Non-GAAP EPS landed at $25.11 against a $20.2843 consensus. GAAP gross margin printed 84.6%, against 37.7% a year earlier. Operating cash flow of $25.388 billion in a single quarter argues for structural change beyond a normal cyclical bounce.
CEO Sanjay Mehrotra was direct about why. “The memory industry has been structurally transformed by the proliferation of AI.” Management has signed 16 strategic customer agreements with take-or-pay terms that represent roughly $100 billion in remaining performance obligations and projected $22 billion in customer cash deposits and related commitments.
The strategic supply agreement with Anthropic disclosed June 22, 2026 is the headline example. Mehrotra also said HBM can fill only 50% to two-thirds of demand in 2026.
The bull thesis writes itself from there. Micron is one of only three HBM suppliers, alongside SK Hynix and Samsung. It crossed $1 trillion in market cap in May. Year to date the stock is up 296.92%. Q4 guidance of $50 billion in revenue and $31.00 in non-GAAP EPS implies the trajectory is accelerating.
What a 3x from here actually requires At roughly $1,046.96 on June 29, a 3x outcome puts shares near $3,000. Every sell-side target sits below that. UBS is the Wall Street high near $1,625. Bank of America, Needham, Stifel and TD Cowen cluster between $1,300 and $1,600. Post-earnings, Susquehanna and DA Davidson have pushed to $2,000, which is the most aggressive published number on the desk and still well short of the headline scenario.
To get to $3,000, you need a stack of three things to break right. First, EPS power has to climb past the $31.00 ± $1.00 Q4 guide into a sustained run rate few analysts will underwrite today. Second, the multiple has to hold or expand, even though the trailing P/E already sits around 26x and the forward P/E near 7x reflects estimates that have not yet caught up to guidance.
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Third, the take-or-pay contracts have to do what Mehrotra claims, which is convert memory into something closer to a utility deserving a premium for predictable cash flows. Each of those is defensible. Obviously, none is guaranteed.
The bear case Goldman is making Goldman Sachs sits at roughly $900. Their argument is that today’s near 85% gross margins represent a cycle peak that will normalize lower. Memory has always been a synchronized capacity business, and SK Hynix, Samsung and Micron are all spending.
Micron itself guided full-year FY2026 capex to approximately $27 billion, with ID1 on track for first wafer output in mid-calendar 2027 and ID2 in late-calendar 2028. When that bit supply lands, even strong AI demand will compress pricing power. CFO Mark Murphy effectively conceded the point on the call, saying “we are at margin levels where incremental price yields less gross margin expansion.”
There is also concentration risk. Lead-customer dependence on HBM4, hyperscaler research into memory compression techniques that could cut usage by up to 40x, and the historical track record of memory cycles ending badly all sit on this side of the ledger.
The verdict The fair read is that Micron is a different company than it was 24 months ago, and the multi-year contracts genuinely change the cyclicality argument. A double over a few years is defensible on the numbers in hand.
A triple requires the supercycle to extend deep into 2028 and beyond, with margins holding far above prior peaks. Bulls have current data. Bears have cycle history. Both are right until one of them is not.
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OpenAI’s ChatGPT has built an ideal $1,000 stock portfolio for the second half of 2026, focusing on companies positioned to benefit from the ongoing artificial intelligence infrastructure boom.
The portfolio was created after analyzing U.S. stock market fundamentals, earnings trends, AI-related capital spending, interest rate risks, and sector-specific growth opportunities.
The resulting allocation is concentrated in companies at the center of AI infrastructure, cloud computing, semiconductors, and enterprise software.
The portfolio is designed for investors seeking growth through the remainder of 2026, a period expected to be driven by rising AI spending, strong corporate earnings, and continued demand for data center infrastructure.
H2 2026 $1,000 allocation Nvidia (NASDAQ: NVDA) received the largest allocation at 25%, representing a $250 investment. The chipmaker remains at the center of the AI boom as the leading supplier of AI accelerators powering data centers built by major cloud providers.
Microsoft (NASDAQ: MSFT) secured a 20% weighting, equivalent to $200. Alongside its AI exposure through Azure, the company benefits from diversified revenue streams across enterprise software, cloud services, and productivity applications.
Another 20% of the portfolio was allocated to Broadcom (NASDAQ: AVGO). The semiconductor and infrastructure software company has emerged as a key beneficiary of growing demand for custom AI chips and networking equipment needed to support large-scale AI deployments.
Micron Technology (NASDAQ: MU) ranked fourth with a 15% allocation, or $150. The company is benefiting from strong demand for high-bandwidth memory, a critical component used in AI servers that is expected to remain supply-constrained through much of 2026.
ChatGPT also allocated 10% of the portfolio to Oracle (NASDAQ: ORCL), representing a $100 position. Rising demand for AI-related cloud infrastructure has helped drive growth in the company’s cloud business and contract backlog.
Rounding out the portfolio is Palantir Technologies (NASDAQ: PLTR), which received the remaining 10%, or $100. The software company continues expanding its presence in both government and commercial AI markets, providing direct exposure to growing AI adoption.
Explaining AI dominance The portfolio is built around what many analysts view as the market’s strongest investment theme in AI infrastructure spending.
In this line, hyperscalers are expected to invest hundreds of billions of dollars in AI infrastructure this year, driving demand across semiconductors, cloud computing, networking, and enterprise software. As a result, AI and semiconductor stocks remain among the market’s strongest earnings-growth opportunities.
However, ChatGPT identified several risks, noting that many AI-related stocks trade at elevated valuations following strong gains over the past two years.
Persistent inflation and higher interest rates could pressure growth stocks, while any slowdown in AI spending could weigh on earnings and broader sector performance.
SummaryMicron delivered another record-breaking quarter, with Q3 revenue surging to nearly $41.5 billion on exceptional pricing strength.Non-GAAP gross margins soared to nearly 85%, more than doubling year-over-year, driving adjusted EPS to $25.11 versus $1.91 last year.Management guided Q4 revenue to $50 billion, well above consensus, with gross margins expected to rise further to 86% as price increases moderate.MU generated $18.3 billion in adjusted free cash flow, reduced debt by 40%, and plans to return 100% of excess cash to shareholders over time. Tim Robberts/DigitalVision via Getty Images
As companies try to pivot to a future of Artificial Intelligence, there have been a number of clear winners in the market. One of the biggest has been Micron Technology, Inc. (MU), with
38.33K Followers
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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As demand for memory and storage products has surged and supply has been limited, Micron Technology (MU 8.93%) has been benefiting from the ongoing shortage in a big way. Its results have looked fantastic, as it has been able to raise prices and generate impressive margins amid continuously strong demand.
The stock has soared 800% over the past 12 months and has become one of the most valuable companies in the world, with a market cap of around $1.3 trillion, heading into trading this week. Is it only a matter of time before it reaches a $2 trillion market cap?
Image source: Getty Images.
Micron's valuation remains low, based on analyst forecasts for earnings A big reason investors remain optimistic that Micron's stock can go higher is due to the incredible results it has been generating. Although the stock's gains are massive, it's not trading at an obscene valuation with its earnings multiple in the triple digits. Instead, shockingly enough, its forward price-to-earnings (P/E) multiple is in single digits. Based on analyst estimates of how its earnings will look in the year ahead, Micron's forward P/E is only seven.
Given the ongoing shortage of memory products and the continued rise in demand and prices for its products, analysts are bullish on Micron's growth outlook. And when factoring that in, the stock's valuation looks cheap. By comparison, the average stock in the S&P 500 trades at a forward P/E multiple of 21, and thus, you might easily conclude that Micron is a bargain buy.
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Is $2 trillion in market cap attainable for Micron Technology? For Micron to reach a $2 trillion valuation, it would need to rise by about 56% from its current level. That would mean its price rises to around $1,770. Even with such an increase, that might push its forward P/E below 12, which still doesn't look all that high.
It's a feasible possibility given the hype around memory and storage stocks these days and the ongoing investments in tech driven by excitement around artificial intelligence. Investors may, however, also be hesitant to value the tech stock that high due to the industry's cyclical nature in previous years and the potential for a significant sell-off once supply catches up to demand.
Micron's business is red hot, but a lot hinges on expectations of future demand and supply for memory and storage products. Given the uncertainty and risk of a steep correction, I'd stay on the sidelines. Although it has room to rise higher, it may have plenty more room to fall significantly as well.
Micron (MU - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Over the past month, shares of this chipmaker have returned +16.6%, compared to the Zacks S&P 500 composite's -2.9% change. During this period, the Zacks Computer - Integrated Systems industry, which Micron falls in, has gained 14%. The key question now is: What could be the stock's future direction?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Revisions to Earnings EstimatesHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For the current quarter, Micron is expected to post earnings of $25.35 per share, indicating a change of +736.6% from the year-ago quarter. The Zacks Consensus Estimate has changed +43.5% over the last 30 days.
For the current fiscal year, the consensus earnings estimate of $64.26 points to a change of +675.2% from the prior year. Over the last 30 days, this estimate has changed +5%.
For the next fiscal year, the consensus earnings estimate of $124.34 indicates a change of +93.5% from what Micron is expected to report a year ago. Over the past month, the estimate has changed +20.6%.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #1 (Strong Buy) for Micron.
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
In the case of Micron, the consensus sales estimate of $50.73 billion for the current quarter points to a year-over-year change of +348.3%. The $121.46 billion and $222.54 billion estimates for the current and next fiscal years indicate changes of +225% and +83.2%, respectively.
Last Reported Results and Surprise HistoryMicron reported revenues of $41.46 billion in the last reported quarter, representing a year-over-year change of +345.7%. EPS of $25.11 for the same period compares with $1.91 a year ago.
Compared to the Zacks Consensus Estimate of $36.72 billion, the reported revenues represent a surprise of +12.91%. The EPS surprise was +17.39%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Micron is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Micron. However, its Zacks Rank #1 does suggest that it may outperform the broader market in the near term.
Micron stock was gaining despite SK Hynix and Samsung being set to spend a combined 800 trillion won ($518.58 billion) to build new chip-making hubs in southwest Korea
Micron (MU 6.59%) stock has delivered extraordinary returns over the past year and a half. After a rally of more than 1,200% since the start of 2025, many investors will naturally assume the easy money has already been made on this stock. That may prove true.
But investors should remember something important: A stock does not become a bad investment simply because it has gone up sharply in price. The more relevant question is not about how much Micron stock has risen. It's about whether Micron can keep growing its profits. If the answer is yes, the stock could still have room to run.
Image source: Getty Images.
The stock doesn't need to get more expensive Many investors assume a stock can only rise significantly if investors become even more excited about it. That isn't always the case.
Imagine a company earns $10 billion in annual profits and investors value the business at $200 billion. That would give it a price-to-earnings ratio of 20. If profits eventually rise to $20 billion and the market keeps putting that same valuation on the company, its market cap would rise to $400 billion.
That hypothetical stock would have doubled even though investors had not become any more optimistic about the business. Rather, the business would have become more valuable because its profits rose.
Therein lies the basic bull case for Micron. If the company can continue to grow its profits, the stock can keep rising even if the valuation remains unchanged.
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The bull case for why profits could continue to grow Micron sits at the center of one of the largest technology spending booms in decades.
Companies around the world are investing heavily in artificial intelligence infrastructure. The data centers they are building and equipping need capacious quantities of advanced memory to effectively handle the workloads involved in training and running increasingly powerful AI models. That surging demand has left the entire memory industry short on supply, which has helped Micron and its peers grow revenue and profits.
In the latest quarter, Micron's revenue more than quadrupled year over year from $9.3 billion to $41.5 billion, while operating profit surged more than tenfold from $2.2 billion to $33.3 billion.
At the same time, Micron is selling more of its most advanced memory products -- such as high-bandwidth memory -- for AI applications. That will help the company generate even greater profits from each dollar of revenue.
If AI infrastructure spending remains strong and data center clients continue buying premium memory products, Micron could sustain its current levels of profitability or keep growing its earnings over the next several years.
That possibility helps explain why some investors believe the stock can continue climbing even with a massive rally in behind it.
The real question investors should focus on While higher profits are desirable, the key question is not whether Micron can grow profits next quarter, but whether it can keep its profit margins high over the long term -- say, for the next five to 10 years.
That distinction matters. Many companies experience a few great years. But far fewer companies maintain strong profits for a decade or longer.
If Micron can continue earning more money year after year, the stock could still deliver attractive returns, even after its recent rally. On the other hand, if today's high margins prove temporary, the outcome will look very different.
What could go wrong? This is where investors need to be careful.
The memory industry has a long history of boom-and-bust cycles. Periods of strong demand often lead to strong profits. Strong profits encourage memory makers to expand their production capacity. But with multiple competitors following the same playbook at the same time, this has repeatedly led to the industry building capacity in excess of demand. When supply eventually catches up, their pricing power dissipates, and profits slide.
Micron has experienced this pattern over and over again across the decades. So the risk is not that the demand from the AI build-out will suddenly disappear. The risk is that the current situation represents an unusually good phase for sellers in a still-cyclical market rather than a new normal.
If Micron and its competitors increase production (which they are doing) and memory supply catches up with demand, Micron could face pressure on both pricing and profits.
What does it mean for investors? Can Micron stock double again? I think there's a good chance it can.
But investors should focus less on the stock price and more on the company's ability to keep growing profits. If Micron continues to benefit from AI spending and successfully expands its higher-margin memory business, earnings could continue to move higher. And if earnings keep growing, the stock could follow.
In other words, the most important question isn't whether Micron stock has already risen too much. It's whether the company can keep making more money, and for how long.
Those answers will likely determine where the stock will head next.
Micron stock NASDAQ:MU is back in focus after South Korea unveiled a massive semiconductor expansion led by Samsung Electronics and SK Hynix.
For now, the plan is less a direct threat to Micron than a validation of the theme behind its rally: AI memory has become scarce, valuable and strategically important.
But the harder question is, if Samsung and SK Hynix spend hundreds of billions of dollars on new DRAM and high-bandwidth memory capacity, could today’s shortage eventually turn into tomorrow’s supply problem?
Micron’s latest results gave strong signals as the company delivered a blowout quarter, helped by AI demand, high-bandwidth memory shortages and strong pricing across the memory market.
More importantly, Micron showed that customers are no longer treating memory as a routine chip input.
They are trying to lock it in.
Micron has signed $22 billion in strategic customer commitments across data centre, consumer and automotive markets.
These agreements include take-or-pay terms, cash deposits and pricing floors.
In plain English, customers are committing ahead of time because they do not want memory supply to become the bottleneck that slows their AI buildouts.
Daniel Newman, CEO of Futurum Group, told Reuters that the scale of the AI buildout has been underestimated, and that memory should keep commanding “premium pricing” while supply remains constrained.
That is the core Micron bull case, as AI demand is running faster than supply, and MU is one of the few companies able to serve that market at scale.
But there is a catch. Analysts say Micron’s bull case still rests heavily on a tight memory market, and if fresh supply starts to return, pricing power could be the first part of the story to come under pressure.
South Korea’s new chip push is not aimed at Micron directly, but it changes the supply conversation.
Samsung Electronics and SK Hynix are preparing to invest 800 trillion won, or about $518 billion, in new chip fabrication sites as Seoul tries to cement the country’s lead in AI memory.
The wider plan is tied to President Lee Jae Myung’s industrial strategy, which aims to build semiconductor strength beyond existing hubs around Seoul.
For Samsung, the investment is partly a comeback strategy. The company remains one of the world’s biggest memory players, but SK Hynix and Micron have moved faster in high-bandwidth memory, the high-margin chip category used alongside AI processors.
The analysts at KB Securities-Jefferies noted that if Samsung qualifies successfully for next-generation HBM, the supplier structure could shift more toward SK Hynix and Samsung because of Samsung’s manufacturing capacity.
SK Hynix, meanwhile, is trying to defend the AI-memory crown it has built through Nvidia-linked HBM demand.
As per analysts, its customized AI memory has “fundamentally changed” industry economics and helped SK Hynix become the market leader.
For Micron investors, Korea’s $518 billion chip blitz is not an immediate sell signal.
As per experts, the new fabs will take years to build, and HBM qualification is difficult.
Customers do not switch suppliers overnight, and AI demand is still running ahead of available supply, which is why Micron has been able to secure long-term commitments and pricing protections in the first place.
The risk seems to be more about expectations.
Micron’s valuation has expanded because investors believe memory scarcity can last longer than in past cycles.
If Samsung and SK Hynix convince the market that a credible wave of new DRAM and HBM supply is coming after 2027, investors may start discounting weaker pricing power before the capacity actually arrives.
Massive demand for memory chips for artificial intelligence (AI) training and inference has been a boon for the three major memory chipmakers. Shares of Micron Technology (MU 6.59%) have climbed over 850% in the past year, while its Korean competitors SK Hynix and Samsung Electronics are up nearly 900% and 500%, respectively, in the same period. All three have benefited from a massive supply/demand imbalance, which has allowed them to charge record-high prices for their products.
Now SK Hynix is making a move that should be a warning to Micron investors and the memory market in general. The company will list American depositary receipts on the Nasdaq stock exchange next month. The offer could raise over $29 billion. Here's why Micron investors need to pay attention.
Image source: The Motley Fool.
A massive capital raise for Micron's biggest competitor While we're talking about trillion-dollar companies, make no mistake: $29 billion is still a huge amount of money to raise from the public market. Few other companies have ever raised that much at one time from a stock offering.
That capital has to come from somewhere. With Micron being the only one of the big three memory chipmakers with U.S.-listed shares, it may feel the brunt of the shift in capital as investors look to broaden exposure in the memory market.
The bigger thing Micron investors need to worry about, however, is exactly what SK Hynix plans to do with all that cash. In its SEC filing, management said it intends to use all proceeds to construct new production facilities in Korea and to purchase new fabrication equipment.
Those facilities could start producing new chips before the end of 2027, with a rapid ramp-up in capacity through 2030. It's also constructing an advanced chip packaging facility in Indiana that's set to open in 2028.
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SK Hynix's expansion plans could rapidly increase the total supply of memory chips in a market where products are mostly commoditized. SK Hynix chips can be used in place of Micron chips. As a result, if SK Hynix has more chips to sell, it could gain market share and put pressure on pricing.
Of course, Micron isn't standing still. It's building two factories in Idaho, which are set to open in 2027 and 2028. It also acquired a site in Taiwan where it expects to start production in mid-2027, and it's planning additional projects set to start production later this decade. Overall, management expects supply constraints to persist through the end of next year.
As more supply comes online to meet demand, prices will fall. Overall profits can continue to climb for some time, as more unit sales offset declining market prices. However, profits will eventually fall as supply growth outpaces demand growth, with SK Hynix, Micron, and Samsung all racing to build capacity. SK Hynix's capital raise could accelerate that peak.
Micron investors should exercise caution The current upward earnings cycle in the memory chip market can't last forever. Micron is already taking steps to protect itself against what could be a severe downcycle in a few years. It's signing long-term strategic customer agreements that lock in pricing at a maximum equal to its current price, while also creating a pricing floor.
Many of those agreements run through 2030, and management says they represent about 20% of its dynamic random-access memory (DRAM) chip volume. The agreements could reduce the cyclical downturn later this decade, but it also caps the upside it could generate over the next year or two from increased pricing.
With SK Hynix's aggressive build-out plans about to receive significant capital backing, Micron may be betting on an accelerated timeline toward the market's peak pricing.
The stock price has climbed to about 9 times forward earnings expectations and 8 times fiscal 2028 earnings expectations. If Micron's earnings cycle peaks, as expected, in 2028, it's currently trading for a relatively expensive multiple compared to its historic valuation. If the competition pushes that timeline forward or worsens the downcycle, it could prove way overvalued at today's price.
After a powerful multi-month rally, the stock remains in a well-defined uptrend, with modest premarket gains suggesting investors are buying on pullbacks rather than chasing a fresh breakout. The bullish outlook remains intact following last week’s earnings.
Jim Lebenthal Sees A Fundamental ShiftCerity Partners Chief Market Strategist Jim Lebenthal told CNBC on Thursday that Micron’s earnings marked a fundamental shift for the AI trade, arguing that memory has moved beyond a typical cyclical commodity story.
He said Micron controls an “irreplaceable resource” for AI accelerators, supported by 16 strategic customer agreements through 2029 that improve visibility on pricing and revenue.
Lebenthal said tight supply has given Micron pricing power, though he warned that extreme pricing could eventually push customers to seek workarounds or use less memory.
Pierre Ferragu Warns Pricing Could Hit DemandNew Street Research analyst Pierre Ferragu told CNBC on Friday that Micron is benefiting from extreme memory pricing, but he expects those higher prices to hurt demand eventually.
He said Micron is posting nearly 85% gross margins, with DRAM gross margins around 90%, implying DRAM prices have risen about fivefold from levels tied to 50% gross margins.
Ferragu said AI has made memory a key bottleneck, but new capacity could arrive in late 2027 or 2028, pushing prices lower as demand destruction takes hold.
Bryn Talkington Sees More UpsideRequisite Capital’s Bryn Talkington told CNBC on Thursday that Micron’s fundamentals have improved and expects the stock to move higher.
She said earnings rose from $1.91 a year earlier to an expected $20.62, representing growth of more than 1,000%, while the stock has climbed about 700% and recently bounced near its 20-day moving average.
Talkington said the stock continues to make higher highs and higher lows, and heavy call-option premium suggests more upside.
Paul Aronson Says Traders Will Seek The Next CatalystOptiver trader Paul Aronson told CNBC on Thursday that equity-market activity this week focused on macro, AI, and semiconductor positioning, with Micron drawing heavy attention before its earnings report.
He said traders positioned around Micron throughout the week, then unwound after the company reported results.
Aronson said the market took time to digest Micron’s overnight move and morning reversal, and investors will now look for the next major catalyst.
Micron Technical AnalysisMicron’s long-term trend remains firmly bullish. The stock has surged 818.73% over the past 12 months and continues to trade comfortably above all major moving averages. At $1,136.50, the shares sit 10.3% above the 20-day simple moving average of $1,035.41 and 168.2% above the 200-day simple moving average of $425.84.
The moving averages remain in a bullish alignment, with the 20-day average above the 50-day average and the 50-day average above the 200-day average. That structure typically signals continued buying interest during market pullbacks.
Momentum also remains constructive. The MACD indicator is above its signal line and the histogram remains positive, suggesting buying momentum has improved after the previous consolidation.
The next upside level to watch is the June high and 52-week high of $1,255. A move above that level could signal renewed upside momentum. On the downside, the 20-day moving average near $1,035 is the first key support. A decline toward the 50-day moving average at $802.14 would represent a more meaningful shift in the stock’s trend.
Analyst Consensus And Recent ActionsThe average analyst price forecast stands at $1,519.32. Recent analyst actions include:
Citigroup raised its Buy price forecast to $1,400 on June 25. Cantor Fitzgerald maintained an Overweight rating and a $1,500 price forecast on June 25. Barclays raised its Overweight price forecast to $2,000 on June 25. Micron Price ActionMU Stock Price Activity: Micron Technology shares were up 0.32% at $1136.00 during premarket trading on Monday, according to Benzinga Pro data.
Photo via Shutterstock
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Crucial Support Under SiegeThe recent slide has pushed QQQ below its 20-day simple moving average (SMA) of $724.72, threatening a larger trend reversal, according to Benzinga Pro. Bearish momentum is accelerating as the MACD indicator undergoes a negative crossover, while the RSI has plunged to 46.45.
Traders are now eyeing the immediate floor at the 50-day SMA of $702.78. A definitive close below this crucial support could trigger systematic liquidation toward the 100-day SMA at $651.76.
Unprecedented Volatility DisconnectWhile tech indexes slip, options markets are flashing signals unseen since the dot-com era. According to The Kobeissi Letter, the spread between the tech-heavy volatility index ($VXN) and the broader market counterpart ($VIX) has blown out to 12 points—the highest in at least 23 years.
Fundamental BackstopDespite the steep technical correction and record-high fear gauges, underlying corporate fundamentals remain exceptionally strong. Data from Goldman Sachs, shared by Mark Zaccardi on X, shows that “Nasdaq 100 EPS growth expected to be +43% this year,” comfortably beating the broader S&P 500 consensus of 24%.
While technical lines are fracturing in the near term, this stellar bottom-up earnings performance suggests that the current pullback may ultimately be a violent valuation reset rather than a structural bear market.
How Have Markets Performed In 2026?The S&P 500 index has advanced 7.23% year-to-date. Similarly, the Nasdaq Composite index was up 8.87%, and the Dow Jones gained 7.22% YTD.
The SPDR S&P 500 ETF Trust (NYSE:SPY) and QQQ, which track the S&P 500 and Nasdaq 100, respectively, closed lower on Friday. The SPY ended down 0.72% at $728.99, while the QQQ declined by 1.38% to $706.52.
Meanwhile, the Dow tracker, State Street SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA), closed 0.29% lower on Friday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: JHVEPhoto via Shuttesstock
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Nvidia (NVDA 1.42%) has become almost synonymous with the words "artificial intelligence" (AI). When people think of AI, they automatically think of this company -- and for good reason. Nvidia has generated quarter after quarter of explosive earnings growth, with revenue and profit reaching record levels, thanks to its AI products.
The company is the world's leading designer of graphics processing units (GPUs), the powerful chips used to fuel AI tasks, and has expanded across other related products, such as networking tools and enterprise software, to build complete AI systems.
Investors recognized Nvidia's strength in AI and raced to get in on this exciting growth story. The result? Nvidia stock soared more than 1,100% over the past three calendar years.
Of course, investors are always on the lookout for another stock that may perform as well. They may not have to look very far. Micron Technology (MU 6.59%) has proven itself to be an AI heavyweight, providing the memory and storage crucial for AI use. Is Micron stock the new Nvidia? Let's find out.
Image source: Getty Images.
Increasing earnings over time Micron isn't new to the technology scene. The company got its start almost 50 years ago and has served computers and other devices with a portfolio of memory and storage options. This helped the company increase earnings over time, but at a much slower pace than what we're seeing today.
MU Net Income (Quarterly) data by YCharts
Though Micron has seen business ebb and flow in the past, as is normal in the cyclical semiconductor industry, the current surge is a whole new ball game. Needs linked to AI have supercharged growth, as we've seen in recent quarters. The latest is the perfect example, with revenue more than quadrupling to reach past $41 billion and net income jumping from $1.8 billion in the year-earlier period to an eye-popping $28 billion.
On top of this, Micron says that demand is surpassing supply, and the company expects this to continue beyond this calendar year. This supply situation is due to strong AI demand as well as general supply constraints that are impacting the entire memory industry. These include various factors, including the time it takes to ramp up manufacturing facilities and obtain permits, and a complex regulatory framework.
While this is a challenge for Micron, it also means that competition isn't a major problem: There is more than enough business for each of the top players to generate growth.
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How Micron resembles Nvidia Now, let's consider how Micron may resemble Nvidia. Like Nvidia, it plays a key role in the AI growth story. The company offers the DRAM, NAND, and HBM memory products that are crucial to the functioning of the technology. And we can imagine that, as the use of AI agents increases, the need for memory power may become even greater. Agentic AI, seen as the next AI growth driver, involves AI taking action, often through several steps, to solve problems.
Also like Nvidia, Micron has been around for decades, perfecting its products, and today, both companies have achieved extremely high profitability on sales. In fact, Micron's gross margin just surpassed that of Nvidia. Micron's reached more than 84% in the recent quarter, while Nvidia's gross margin tops 74%. So not only are these players benefiting from revenue growth in the AI boom, but they are translating that into significant profit.
One area that separates the two is the following: Nvidia is the AI chip leader and has expanded into related products, as mentioned above. Micron remains a memory and storage specialist -- and in AI, though Micron is growing fast and is among the leaders, South Korea's SK Hynix often is seen as the AI memory giant.
This doesn't necessarily mean Micron won't take the path of Nvidia, from an earnings and stock performance perspective. It does mean the company might come with a bit more risk, though.
Now, let's consider stock performance. Micron is already well on its way along an Nvidia-like path. The stock has soared more than 800% over the past year. So I think Micron might already be the next Nvidia -- and the demand and revenue growth Micron has seen in recent months suggest the stock still may have plenty of room to run over the long term.
For its fiscal third-quarter earnings report, Micron Technology (MU 6.59%) announced monster results. Earnings per share (EPS) of $25.11 and revenue of $41.5 billion easily beat Bloomberg analyst consensus EPS estimates of $20.39 and revenue estimates of $35.1 billion.
For its upcoming fiscal fourth quarter, the memory chipmaker expects revenue to fall in the range of $49 billion to $51 billion. That would beat analysts' consensus estimates of $43.2 billion.
Those results gave the stock price an immediate boost after earnings, pushing it above $1,000 per share. That may leave some wondering whether a stock split is now more likely in the company's foreseeable future.
Image source: Getty Images.
The benefits of a stock split There's a perception that stock splits have benefits, but that can be separated between what's more concrete and what's investor psychology. There is evidence that stock splits can help push prices higher, according to data published by Statista sourced from Bank of America's Research Investment Committee.
The committee found that, for four decades, companies that split their stock saw an average total return of 25.4% in the year following the announcement of the split.
That is just an average, however, so there's nothing that suggests Micron's stock price performance would follow a similar path. As of June 24, the Micron stock price is already up more than 260% on the year, so an announcement of a stock split may not offer the same kind of boost it could for other companies' stock prices.
Moving to investor psychology, some shareholders like seeing stock splits because they can make shares seem more affordable and attract new investors. For instance, even though buying 10 shares of a $100 stock is the same as buying one share of a $1,000 stock, that $100 price point sounds more affordable.
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For a stock split, it is up to Micron's management whether one will happen. The company has split its stock in the past, but its last split was in 2000. That history offers little indication of what might happen in 2026.
Also, because of the rise in fractional investing, the management team may feel less need to split its stock. If an investor wanted to buy $50, $100, or $200 worth of Micron stock, they could already do so.
While investors can't control whether Micron will split its stock, they can decide whether to consider it a worthy long-term investment.
Bank of America is an advertising partner of Motley Fool Money. Jack Delaney has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool has a disclosure policy.
About two weeks ago, Advanced Micro Devices announced the acquisition of MEXT, a start-up that has built artificial intelligence (AI)-driven software designed to make NAND flash behave like dynamic random-access memory (DRAM).
The technology uses predictive algorithms to identify frequently accessed data and move it between flash storage and high-speed memory in real time, reducing the amount of expensive DRAM a data center needs to run AI workloads at scale. According to MEXT's own press release, the software can cut memory costs by nearly half while expanding usable memory capacity by two to four times.
For investors in Micron Technology (MU 6.59%) and Sandisk (SNDK 10.45%), the knee-jerk read is obvious: If AMD can teach flash to behave like DRAM, demand for high-bandwidth memory contracts declines. The knee-jerk read is terribly wrong.
What MEXT actually does (and doesn't do) MEXT's technology operates in the software tier between existing storage and compute. It doesn't replace DRAM or HBM. Instead, it reduces the amount of high-speed memory certain workloads require by optimizing what lives in it at any given moment. That's a meaningful efficiency gain for enterprise customers running general-purpose AI workloads, where memory is a cost constraint.
What it cannot touch is the physics of training large AI models and running inference at the performance levels that hyperscalers require. An Nvidia Blackwell graphics processing unit (GPU) demands HBM4 not because no one has tried to work around it, but because the bandwidth requirements of training trillion-parameter models are architectural constraints, not software problems. No predictive tiering algorithm changes what the silicon needs.
MEXT is a tool for enterprises trying to stretch existing infrastructure. It is not a substitute for the memory products that Micron and Sandisk sell to massive tech companies.
Image source: Getty Images.
Micron's position is structurally insulated Micron Technology's entire 2026 HBM4 production is sold out under binding multi-year contracts. At COMPUTEX 2026 in May, the company laid out an end-to-end AI memory portfolio spanning data center to intelligent edge, all in high-volume production. Fiscal first-quarter 2026 revenue hit $13.64 billion, up 57% year over year, with gross margins around 56%, driven by HBM pricing power that comes from contracted scarcity.
The reason Micron's HBM business is immune to MEXT is the same reason it's immune to most software-layer interventions: The customers buying it aren't as price-sensitive as enterprise IT buyers. Hyperscalers building AI training clusters are optimizing for bandwidth and compute density, not TCO reduction. That's a different buyer with different priorities.
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Sandisk is benefiting from the same trend AMD is targeting Here's the counterintuitive part: MEXT's technology, which moves data between flash and DRAM, depends on high-performance NAND flash to function. The better and faster the flash tier, the more effective the tiering software becomes. Sandisk is the company building the flash tier.
In third-quarter fiscal 2026, Sandisk's data center segment revenue surged 233% sequentially to $1.47 billion, driven by enterprise SSDs built specifically for AI workloads. Full-year revenue jumped 61% to $3.03 billion, beating Wall Street consensus by 12%.
Sandisk's stock is up roughly 750% year to date at the time of this writing, the best-performing large-cap technology stock in the S&P 500 so far in 2026. AMD's bet on memory optimization software is, at its core, a bet that NAND flash will absorb more of the workloads traditionally handled by DRAM. That's a thesis that requires better, faster NAND -- which is exactly what Sandisk makes.
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So no, neither Micron nor Sandisk is under meaningful threat from the MEXT acquisition. The market made that clear today, with both stocks flirting with 20% gains this week on June 25. The real risk for both has always been the same one that defines memory investing: If AI infrastructure spending slows faster than new capacity comes online, pricing power compresses, and margins follow.
Both companies are going to be just fine. AMD's MEXT acquisition is a smart move for its data center business, but it doesn't change the fundamental thesis for Micron or Sandisk. If anything, it might be a tailwind.
When Apple NASDAQ: AAPL signals it may have to raise prices because memory costs are rising, the market pays attention. For investors already holding Micron Technology NASDAQ: MU, Seagate Technology Holdings NASDAQ: STX, Western Digital Corporation NASDAQ: WDC, and Sandisk Corporation NASDAQ: SNDK, that warning isn't a red flag—it's confirmation of pricing power.
Growth Investor's Louis Navellier sees all four names as direct beneficiaries of the same structural shortage, with one clear leader at the top of the stack.
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When Pricing Power Meets a 2-Year BacklogMicron Technology Today
MU
Micron Technology
$1,132.33 -81.23 (-6.69%)
As of 06/26/2026 04:00 PM Eastern
52-Week Range$103.38▼
$1,255.00Dividend Yield0.05%
P/E Ratio25.64
Price Target$1,263.76
The setup for Micron is straightforward: data centers want the fastest memory chips available, Micron makes them, and demand is running well ahead of supply. That's why analysts—who have historically lagged on this stock—keep revising estimates upward, and why the order backlog tells a more compelling story than the revenue line alone.
Navellier calls Micron something close to a monopoly in the data center memory segment. Samsung OTCMKTS: SSNLF competes on volume, but for hyperscalers building out AI infrastructure, Micron's high-bandwidth memory is the preferred choice.
That preference translates directly into operating margins. When you have pricing power in a supply-constrained market, margins expand—and Micron's have.
He ranks Micron at the top of his eight-factor fundamental model, which weighs sales growth, margin expansion, earnings stability, analyst revisions, and surprise history. Recent upward revisions across the analyst community, he notes, are a reliable signal of what's coming. Micron's last earnings report blew past expectations, and Navellier sees that pattern continuing—particularly given that analysts in this space are notoriously conservative, penalized more for overestimating than for being late.
The order backlog, extending roughly two to three years out, driven by data center construction, is why he isn't treating this as a late-cycle trade. More than half of U.S. construction activity is currently tied to data center builds, and whoever has the chips has the leverage.
The Reliability Play in an Unreliable MarketSeagate Technology Today
STX
Seagate Technology
$899.90 -125.46 (-12.24%)
As of 06/26/2026 04:00 PM Eastern
52-Week Range$138.30▼
$1,145.00Dividend Yield0.33%
P/E Ratio85.38
Price Target$831.79
Not every data center storage decision comes down to the fastest chip. Reliability matters enormously—downtime in a hyperscale facility is catastrophic—and that's where Seagate has built its reputation over decades of enterprise deployments.
Navellier calls Seagate his favorite solid-state name in the group. Its data center business is accelerating as the transition from spinning hard drives to solid-state drives continues across enterprise deployments, and the company's reputation for bulletproof performance has made it a preferred vendor for operators who can't afford failure.
That brand equity is doing real work in a market where procurement decisions are increasingly driven by reliability track records, not just spec sheets.
Revenue and earnings growth have been strong, and Seagate scores well on his fundamental model—though at a higher multiple than Micron. That premium doesn't concern him. Storage has historically demanded a higher valuation than DRAM, and Seagate's market share position and switching costs justify the spread. His posture: ride it as long as the fundamentals hold.
Western Digital and Sandisk: Strong Names, Slightly Lower ScoresWestern Digital and Sandisk both have meaningful exposure to the same AI storage surge. Navellier is careful not to dismiss either—comparing them unfavorably to Micron and Seagate, he says, is like being asked to pick a favorite child.
If pressed, he leans toward Sandisk over Western Digital on the basis of analyst revision momentum, earnings surprise history, and margin expansion trajectory. But both names score well on his model; they simply score below the top two. The demand environment is strong enough that all four can win simultaneously—the distinction comes down to who captures the most orders when speed and reliability are the deciding factors.
How to Think About Entry After a Monster RunAll four stocks have posted extraordinary gains. That makes entry feel uncomfortable, and Navellier acknowledges it. His approach: put them on an alert list and buy into daily pullbacks rather than chasing strength. The memory sector's natural oscillation means stocks that run 12% will typically give back 3-4% before the next leg—and those brief windows are where he builds or adds positions.
For investors already in these names, the calculus is different. Navellier's rule for his own portfolio is simple: if a stock still scores well on fundamentals—strong sales, expanding margins, positive revisions, solid surprise history—the size of the gain isn't a reason to sell. The stocks that have run 100%, 500%, or more in his portfolio are still there because the underlying businesses haven't deteriorated. The gain is a feature, not a warning sign.
The broader backdrop supports staying engaged. Data center construction is ongoing, AI compute demand continues growing, and the memory shortage driving Apple's pricing warning isn't a quarterly blip. The bottleneck that's making iPhones more expensive is the same bottleneck that's making these four stocks very difficult to bet against.
Should You Invest $1,000 in Micron Technology Right Now?Before you consider Micron Technology, you'll want to hear this.
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The latest earnings for Micron (MU 6.59%) didn't just show that the supercycle in memory chip stocks is still in session. Its third-quarter fiscal 2026 results showed that the biggest bulls underestimated the growth of the memory industry and that the supercycle is still in its early stages.
Even though Micron, Sandisk (SNDK 10.45%), and other memory companies have mostly gone parabolic over the past year, there is still more room for them to run.
Image source: Getty Images
Discussing Micron's earnings Many investors held their breath waiting for Micron's earnings to come out. Any misses would have dragged down memory stocks and caused investors to worry that the supercycle was slowing down. Meeting expectations may not have been enough, but it would have at least confirmed that the memory industry is still going strong.
It turns out Micron left no room for doubt. Revenue more than quadrupled year over year in the third quarter (ended May 28), breezing past prior guidance. Management had told investors to expect $33.5 billion in quarterly revenue, and it ended up delivering $41.5 billion.
Naturally, Micron soared in after-hours trading, but Sandisk also rallied tremendously as if it were the company that reported earnings that day. It might as well have done just that. Micron's earnings offer a sneak peek at what other memory players will do. Sandisk actually had a higher growth rate than Micron if you look at Micron's previous quarter, so investors are expecting something substantial when Sandisk reports in August.
Commentary offers more optimism for the memory boom It wasn't just Micron's $41.5 billion in third-quarter revenue, or guidance that implies $50 billion in the current quarter, that showed the memory boom is still strong. CEO Sanjay Mehrotra had some remarks that show demand for memory products is not slowing down: "Micron is investing at record levels in technology, products and supply to address our customers' rapidly growing demand. We believe our multiyear Strategic Customer Agreements will significantly enhance the durability and predictability of Micron's strong financial performance."
These statements offer key details. First, Micron is still investing at record levels. The decision to ramp up spending suggests that customer demand will continue to soar for multiple years. Management would not be boosting its investments if it believed this was a short-term cycle.
The company also cited multiyear deals that will help sustain its financial success over the long run. It doesn't seem like a repeat of 2023, when a supply glut and dropping memory prices hurt revenue and profits. That was before infrastructure for artificial intelligence (AI) became the centerpiece of technological innovation and AI became the term of the moment among investors.
An inflection point for memory storage When Sandisk reported its fiscal 2026 third-quarter results, its CEO referred to this moment as an inflection point. The company's next earnings report will give an idea of what the company was doing while Micron quadrupled its revenue year over year.
It also mentioned multiyear customer engagements with "firm financial commitments." This theme of multiyear contracts provides more revenue visibility in a cyclical industry. Furthermore, the surging demand for memory products should be enough to keep prices elevated for a longer period of time. And that will help companies like Micron and Sandisk preserve their high margins.
Investors watched with amazement as Nvidia reached a $5 trillion market cap last year. There was a lot of hoopla about AI bubbles and semiconductor stocks being drastically overvalued through Nvidia's path to becoming the world's most valuable publicly traded company.
Memory stocks like Micron and Sandisk have been battered constantly about bubble concerns. Ignoring the fundamentals and focusing on recent stock gains can lead to such conclusions. Micron, for example, is up by more than 700% over the past year.
However, the price movements of these stocks are based entirely on fundamentals. When revenue and guidance continue to marvel investors, it's no wonder the stocks keep rallying despite their superb year-to-date gains. The memory supercycle appears alive and well.
Micron Technology's (MU 6.59%) spectacular third-quarter earnings report last week shouldn't have surprised anyone. All the signs of a blowout quarterly update were in place well before the memory chipmaker announced its results. I predicted that the stock would soar after its Q3 update and was proven right -- but that didn't require Nostradamus-like prophetic skills.
There was more exciting news than the tremendous recent revenue and profit growth in Micron's latest earnings call, though. The company just revealed a massive multi-decade growth opportunity. It's not AI data centers. It might even be bigger.
Image source: Getty Images.
The robots are coming If you weren't paying close attention to Micron CEO Sanjay Mehrotra's comments, you could have easily missed something really important for his company's growth prospects. In his prepared remarks, Mehrotra stated, "Exciting possibilities enabled by robotics and humanoids, as well as fully autonomous vehicles, portend a robust long-term demand environment for memory and storage."
A few minutes later, he added more color, saying, "Humanoid robots carry 10 times the amount of memory as an average L2+ vehicle, and we expect a sustained, substantial, multi-decade memory demand cycle to begin in the latter part of this decade." That's indeed exciting if you're a Micron shareholder.
Mehrotra's reference to the "average L2+ vehicle" was about vehicles with partial driving automation or greater levels of driving autonomy. These vehicles already use more than five times as many memory chips as the average car today. But, as Micron's CEO mentioned, humanoid robots have 10 times more memory than that high level.
Most of the world's largest robotics companies today focus on industrial robots. However, others, including Agility Robotics, Boston Dynamics (owned by Hyundai), Figure AI, and Tesla (TSLA +1.38%), are pioneering advanced humanoid robots that hold tremendous potential.
How many humanoid robots could walk among us in the future? Bank of America (BAC 0.53%) predicts that the number of robots globally could reach 300 million by 2040. The humanoid robot population could top 3 billion by 2060, with more people owning robots than cars.
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Goodbye, cyclicality? Despite Micron's sizzling performance over the past 18 months, its shares still trade at only around nine times forward earnings. Why is the company's valuation so low? Micron remains a cyclical stock in most investors' eyes. They expect the current supply demand imbalance that is fueling the company's growth to level off within the next few years.
But the promise of a huge new market for humanoid robotics could change the dynamics for Micron. Note that Mehrotra said that this new demand cycle should "begin in the latter part of this decade." The timing could be perfect for Micron if the current AI data center boom moderates around that time, as some expect.
Micron just might be about to say goodbye to the cyclicality of the past. If so, the stock's recent gains could be just the tip of the iceberg.
Bank of America is an advertising partner of Motley Fool Money. Keith Speights has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology and Tesla. The Motley Fool has a disclosure policy.
Since its historic initial public offering (IPO) on June 12, 2026, the market cap of Space Exploration Technologies (SPCX +0.15%), commonly known as SpaceX, has ranked the space technology pioneer among the top 10 largest companies trading on U.S. stock exchanges.
However, that statement doesn't tell the full story. SpaceX's market cap has consistently been greater than Micron Technologies (MU 6.59%) and Advanced Micro Devices (AMD 1.48%) combined. Does that make sense? Is SpaceX really worth more than the sum of these two tech companies' valuations?
Image source: Getty Images.
Playing devil's advocate Allow me to play devil's advocate first. There is a case to be made that SpaceX truly is worth more than Micron and AMD combined. It could even be worth much more than these two companies together.
Exhibit A for this argument is SpaceX's total addressable market (TAM). The company believes that its TAM is a whopping $28.5 trillion, the largest in human history. I don't think Micron's and AMD's combined TAMs come anywhere close to touching that number.
To be sure, SpaceX's current businesses don't justify such a lofty market potential. However, it's not unrealistic to speculate that SpaceX could open up massive new markets that don't even exist today. For example, the company wants to build data centers in space. It wants to manufacture products on the Moon and Mars. It hopes to mine asteroids.
Exhibit B is the three companies' respective market positions. SpaceX dominates the global launch market. Its Starlink unit has a huge head start in the fast-growing satellite internet services market. Artificial intelligence (AI) business xAI continues to score multibillion-dollar deals with AI giants, including Anthropic and Alphabet's (GOOG 2.19%) (GOOGL 1.73%) Google Cloud.
Meanwhile, Micron is one of three major suppliers of memory chips. Despite its tremendous success, AMD plays second fiddle to Nvidia (NVDA 1.42%) in the AI chip market. Neither company stands out as the leader in its respective market the way SpaceX does. And while Micron remains a cyclical stock, there's little concern about cyclicality with SpaceX's businesses.
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Cold, hard facts Now for some cold, hard facts that work against the view that SpaceX is really worth more than Micron and AMD combined. Let's start with the numbers.
SpaceX generated revenue of $18.7 billion last year, up 33% year over year. In the first quarter of 2026, the company's revenue rose by only 15% year over year to $4.7 billion. Meanwhile, Micron's revenue for its fiscal second quarter (which ended Feb. 26, 2026) soared 75% year over year to $23.9 billion. AMD's 2026 Q1 revenue jumped 38% year over year to roughly $10.3 billion.
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Micron and AMD aren't just beating SpaceX on the top line. Both companies delivered strong profits in their latest quarters with sizzling growth. SpaceX, however, posted a net loss of $4.3 billion, reflecting significant bottom-line deterioration compared to the prior year period.
While Micron's and AMD's TAMs may not stack up to SpaceX's huge estimated TAM, they have realistic growth prospects. Micron's high-bandwidth memory (HBM) is a critical component of AI data centers. AMD continues to make inroads in the AI infrastructure market.
We can't ignore SpaceX's governance issues, either. Elon Musk controls over 80% of the company's voting power. If Musk wants SpaceX to move in a direction that's not beneficial to other shareholders, he can do so. That isn't the case with Micron or AMD.
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So, is SpaceX really worth more than Micron and AMD combined? I think the unvarnished truth is no -- at least not right now.
Importantly, though, the answer could be different 10 to 20 years from now. Technological changes could leave Micron and AMD in the dust, while SpaceX flourishes. If SpaceX unlocks new $1 trillion-plus industries, its current valuation could one day look like a bargain.
Still, SpaceX is a metaphorical and literal moonshot for investors. Its grandiose vision may not be realized. In today's real world, I think both Micron and AMD are better picks for investors with their feet on the ground.
The AI boom has transformed one of the semiconductor industry’s most cyclical businesses into one of its tightest markets. Memory chips, once plagued by oversupply and collapsing prices, have become one of the biggest bottlenecks for AI infrastructure.
That shortage has helped lift Micron Technology (NASDAQ:MU | MU Price Prediction), Samsung Electronics, and SK hynix to record profitability as demand for premium memory far exceeds supply. It is in this environment that Apple (NASDAQ:AAPL) is reportedly lobbying the Trump administration for permission to buy memory chips from a blacklisted Chinese supplier.
Micron investors are worried that if a new supply channel is opened, the memory chipmaker’s pricing power, margins, and ultimately its stock could be pressured. However, they needn’t be concerned.
Apple’s Problem Isn’t Micron’s Problem The Financial Times reported that Apple has been lobbying several federal agencies and officials for approval to purchase memory chips from China’s ChangXin Memory Technologies (CXMT), a company placed on the U.S. Entity List because of its ties to the Chinese government and military. Buying from CXMT is reportedly not outright illegal, but doing so without government approval could expose Apple to political backlash and reputational damage.
Apple’s motivation is easy to understand. The company just announced price hikes of roughly 20% on several MacBook and iPad models after CEO Tim Cook said Apple could no longer absorb rising component costs. Its stock suffered its largest single-day loss in more than a year. Memory has become one of the fastest-growing expenses inside consumer electronics, and Apple has long used its enormous purchasing power to squeeze suppliers for lower prices.
Some investors fear that if Washington grants Apple permission, CXMT could become a new source of supply that weakens Micron’s positioning.
Here is where their markets actually stand:
Company Primary Memory Focus HBM Production Micron DRAM, NAND, HBM Yes Samsung DRAM, NAND, HBM Yes SK hynix DRAM, NAND, HBM Yes CXMT Commodity DRAM No CXMT manufactures conventional DRAM products, including DDR5 memory for PCs and servers, LPDDR5X and LPDDR4X for smartphones and mobile devices, and enterprise RDIMM and MRDIMM modules. What it does not manufacture is high bandwidth memory (HBM), the premium chips powering Nvidia‘s (NASDAQ:NVDA) AI accelerators and the data centers behind today’s AI spending boom.
That distinction matters because HBM carries much higher margins than commodity DRAM, and it remains the product driving Micron’s earnings growth.
Apple Helped Create Today’s Memory Shortage Surprisingly, it was Apple itself that helped create the pricing environment it now wants relief from.
During the last memory downturn, DRAM prices collapsed so far that suppliers, including Micron, saw gross margins sink into negative territory. Apple used its position as the world’s largest memory buyer to negotiate rock-bottom prices. Micron Chief Business Officer Sumit Sadana publicly criticized those negotiations, saying Apple’s purchasing tactics were “not constructive” because they discouraged suppliers from investing in new manufacturing capacity.
Many producers delayed or canceled expansion projects. Then AI arrived.
Exploding demand for AI servers rapidly consumed available DRAM capacity, while HBM production became the industry’s highest priority. Years of underinvestment left the market unable to respond quickly, producing today’s shortage and elevated pricing.
In short, Apple is dealing with consequences that were, at least in part, created by the pricing pressure it once imposed on suppliers.
Congressional Scrutiny Remains a Major Obstacle Granted, Apple could still receive government approval, but the political hurdles remain substantial.
Apple attempted something similar in 2022 when it considered sourcing memory from another blacklisted Chinese manufacturer, YMTC. Members of Congress immediately warned the company that moving forward would invite legislative repercussions. CXMT carries many of the same national security concerns, making any approval likely to receive intense congressional scrutiny.
Regardless, even if Apple succeeds, the competitive impact on Micron appears limited. CXMT competes in mainstream DRAM, while Micron’s investment dollars are increasingly directed toward high-margin HBM products where demand continues to exceed supply.
Key Takeaway Apple’s lobbying effort reflects its desire to reduce memory costs after raising hardware prices, not a shift in the competitive landscape for AI memory. CXMT may eventually become another supplier of commodity DRAM, but it does not produce HBM, the segment generating Micron’s strongest growth and profitability.
Ultimately, investors worried this development threatens Micron’s long-term outlook are focusing on the wrong part of the memory market. Apple’s search for cheaper chips says more about its own cost pressures than it does about Micron’s competitive position.
A $1,000 investment in Micron (NASDAQ: MU) stock made one year ago would have grown nearly tenfold, highlighting the semiconductor company’s extraordinary rally driven by artificial intelligence demand.
In this line, on June 27, 2025, Micron stock was trading at $124 per share. By June 27, 2026, MU stock had climbed to $1,132, representing a gain of about 812.9% over the 12 months.
Based on those figures, an investor who allocated $1,000 to Micron stock a year ago could have purchased about 8.06 shares. At the current share price of $1,132, that investment would now be worth roughly $9,129.
MU one-year stock price chart. Source: Finbold Why MU stock has rallied massively The remarkable Micron stock performance has been driven primarily by soaring demand for high-bandwidth memory (HBM) and advanced DRAM products used in artificial intelligence infrastructure.
As AI companies continue expanding data center capacity, demand for high-performance memory has significantly outpaced supply.
To this end, Micron has emerged as one of the biggest beneficiaries of this trend, with its HBM products becoming critical components in AI accelerators and graphics processors.
At the same time, the company has reported that its entire 2026 HBM production capacity has been sold out under long-term agreements, providing strong revenue visibility and pricing power. The launch and rapid adoption of next-generation HBM4 products have further strengthened Micron’s position in the AI supply chain.
Meanwhile, Micron’s latest quarterly results provided another major catalyst for MU stock growth.
For its fiscal third quarter ended May 28, 2026, the technology firm reported revenue of $41.46 billion, far exceeding analyst expectations and marking a substantial increase from the same period a year earlier. Adjusted earnings per share also came in well above Wall Street forecasts.
Management further boosted investor confidence by issuing fourth-quarter revenue guidance of approximately $50 billion, surpassing consensus estimates and reinforcing expectations that AI-related demand remains strong.
The company also benefited from rising memory prices across the DRAM and NAND markets, helping drive significant margin expansion and strong cash flow generation.
Micron’s transition Micron’s shift from a cyclical memory maker to a major AI infrastructure supplier has reshaped investor sentiment toward the company.
Analysts cite long-term supply agreements, strong AI memory demand, and ongoing supply constraints as key factors supporting future growth. Micron has also expanded its HBM market share and strengthened relationships with leading AI chipmakers.
Although risks remain around AI spending and growing competition, Micron is still widely viewed as one of the biggest beneficiaries of the AI boom.
Micron Technology (MU 6.59%) has wowed investors once again with an earnings report showing explosive growth. The company, like tech giants such as Nvidia and Amazon, is playing a key role in the artificial intelligence (AI) revolution, and we have seen this very clearly quarter after quarter.
While Nvidia offers chips that power AI, and cloud providers like Amazon offer capacity for workloads, Micron makes the memory and storage necessary for AI to do its job. Due to the fact that all of these offerings are essential to the functioning of AI, these companies have been early winners of the AI boom. By this, I mean that they aren't just investing in AI; they have also been bringing in significant revenue since the earliest days of this technology revolution.
Micron has reported record earnings in recent quarters -- and the latest period reinforced this positive momentum. The company this week delivered yet another explosive earnings report. Many elements of this report may impress you, but there is one mind-boggling number you won't want to miss. Micron's performance here even surpasses that of AI superstar Nvidia...
Image source: Getty Images.
How Micron fits into the AI story So, first, let's consider how Micron fits into the AI space. As mentioned, it offers memory, and this is through products such as DRAM, NAND, and HBM. DRAM serves as the primary memory of computers or graphics processing units (GPUs), while NAND is used for storage over the longer term. Finally, HBM, or high bandwidth memory, is a key tool for AI, supercharging performance and increasing efficiency.
Micron isn't a new kid in town; the company has been around for nearly 50 years, serving memory for the computing era. But the AI revolution has offered growth a tremendous lift, as we can see in the chart below.
MU Revenue (Quarterly) data by YCharts
Demand has been so high that it's exceeded supply, and Micron expects this trend to continue beyond the current calendar year -- this is due to AI demand and supply constraints. These constraints stem from a variety of reasons, all linked to the complexity of memory development and manufacturing. For example, the time to construct fabs, shortages of skilled workers, and permitting processes are just a few of the elements that have slowed production down and made it impossible to serve 100% of current demand.
As a result, investors shouldn't worry about competition any time soon -- there is plenty of demand to generate growth across many memory providers.
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The number that stands out Now, let's consider Micron's latest earnings report and the one number in particular that stands out. As mentioned, the company excelled across the board, reporting revenue and net income that well surpassed analysts' estimates -- and climbed in the triple and quadruple digits. Revenue jumped to $41 billion from about $9 billion, while net income advanced to $28 billion from $1.8 billion.
But the one metric that caught my eye and suggests high profitability going forward is the company's gross margin. It came in at more than 84%, surpassing the 74% gross margin of AI chip giant Nvidia. And the memory giant forecasts gross margin of 86% for the current quarter, suggesting these levels may be maintained.
All of this shows Micron has become an AI profit machine. Not only does the company have the ability to generate growth, but it's also able to translate this into high profit. Micron said slowing price increases may limit further margin expansion, but that's OK -- if Micron is able to maintain a level of 80% or higher, we can count on this company scoring win after win in this AI revolution.
And it's important to keep in mind that as the AI growth story progresses, the revenue opportunity will also expand. For example, memory is a key element needed in robotics, and robotics is seen as one of the next AI growth drivers.
This mind-boggling, Nvidia-beating number -- Micron's gross margin -- is one you'll want to focus on today and in the quarters to come. So far, it suggests the company could be one of the biggest success stories in the AI boom.
Micron (MU 6.59%) reported revenue and profits that beat expectations.
*Stock prices used were the afternoon prices of June 24, 2026. The video was published on June 26, 2026.
Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool has a disclosure policy.Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
Key Takeaways Micron reported fiscal Q3 2026 revenue of $41.46B and expects about $50B in Q4. MU lifted fiscal Q3 gross margin to 84.6% as AI memory demand strengthened.SNDK expects fiscal Q4 2026 revenue of $7.75B-$8.25B with EPS of $30-$33. Memory stocks seem to have broken off from their traditional cyclical behavior, supported by sustained growth in recent years. The artificial intelligence (AI) boom in data-intensive workloads has substantially increased demand for memory and storage solutions, supporting a durable growth cycle.
Scared by the post-pandemic downturn, memory producers remained disciplined on capacity expansion. As AI demand accelerated, a tight memory supply market has resulted in significant price increases and a more sustained growth trajectory.
Among the memory stocks, Micron Technology, Inc. (MU - Free Report) and Sandisk Corporation (SNDK - Free Report) have delivered exceptional returns over the past year, soaring 867.1% and 4852.3%, respectively. Let’s look in detail at why these memory plays have surged and examine why their strong momentum may continue, making them compelling investment opportunities ahead of the second half of the year.
Micron’s Record Quarter Signals Sustained AI-Driven Growth Micron stock recently touched a record intraday high, fueled by a blockbuster third-quarter fiscal 2026 earnings. Revenues of $41.46 billion for the quarter were up 74% sequentially, according to investors.micron.com. The company has guided further revenue growth for the next quarter. Revenues are expected to come in around $50 billion for the fiscal fourth quarter, indicating robust demand for Micron’s high-bandwidth memory chips used in AI servers.
The company’s profitability has improved significantly, with gross margin increasing to 84.6% for the fiscal third quarter from 37.7% a year ago, aided by strong pricing power and growing demand for high-value AI memory products. Strong cash flows in the fiscal third quarter further suggest that the company’s elevated valuation is supported by improving fundamentals. Additionally, the company’s latest deal with Anthropic will strengthen the adoption of its memory solutions in next-generation AI infrastructure, enhancing long-term demand visibility and reinforcing its growth outlook.
As a result, the company’s expected earnings growth rate for the current year is a whopping 662.5%. The Zacks Consensus Estimate of $63.21 for MU’s earnings per share (EPS) is up 417.3% year over year (read more: Missed NVIDIA’s 900% Run? Micron Could Be AI’s Next Big Winner).
Image Source: Zacks Investment Research
SNDK’s Solid Outlook Highlights Strength of AI Memory Cycle Sandisk’s shares are hovering near their recent intra-day highs as robust demand for the company’s AI-related memory solutions, combined with a supply crunch situation, is leading to strong pricing power and improved growth prospects.
For the third quarter of fiscal 2026, Sandisk reported revenues of $5.95 billion, up 97% sequentially and surpassing its own guidance, according to investor.sandisk.com. Sandisk further expects revenues of $7.75 billion to $8.25 billion for the fourth quarter of fiscal 2026, reflecting continued strong momentum, driven by its focus on high-value customers in the expanding data center market.
The strategic multi-year, high-value New Business Model agreements are expected to strengthen Sandisk’s customer retention capability, improve revenue visibility and support a durable growth trajectory. The company reported non-GAAP EPS of $23.41 for the fiscal third quarter and expects it to increase to $30-$33 in the fiscal fourth quarter, signaling sustained sequential growth momentum.
Consequently, the company’s expected earnings growth rate for the current year is an exceptional 2096.7%. The Zacks Consensus Estimate of $65.68 for SNDK’s EPS is up 1072.9% year over year.
The problem is simple – by the time a stock becomes an AI darling and shows up on the radar of the average investor, the biggest gains are often already behind it.
That’s the lesson legendary investor Louis Navellier wants investors to take away from today’s Friday Digest takeover.
Using Micron (MU) as an example, Louis explains why AI’s latest bottleneck has created enormous winners – but also why the next opportunity may already be taking shape somewhere else. His focus isn’t on chasing yesterday’s headlines. It’s on identifying where institutional money is quietly flowing before the crowd catches on.
That’s the idea behind Louis’ Precursor Intelligence system, which he designed to identify where institutional money is flowing before a stock becomes an obvious AI favorite.
Louis dives deeper into this approach in a free presentation, where he discusses the next phase of the AI boom and the stocks his system is flagging today. You can watch it right here.
If history is any guide, the biggest AI winners of tomorrow probably won’t be the stocks everyone is talking about today.
I’ll let Louis take it from here.
Have a good evening,
Jeff Remsburg
In 1909, Theodore Roosevelt left the White House and set out for East Africa.
He was not going there as a tourist.
Roosevelt, his son Kermit and a team of naturalists were traveling on behalf of the Smithsonian Institution. Much of the journey came down to one difficult task:
Tracking elephants.
In the thick African brush, you don’t just wait for an elephant to step into view. By then, it might already be too late.
You had to look for signs: Fresh tracks in the mud. Broken branches. Disturbed grass. A path through the brush that told you something enormous had passed through before you ever saw it.
That is how I think about stocks.
I am not interested in waiting until the whole world can see the elephant. By then, Wall Street has usually figured out the story. The headlines are everywhere. The crowd has shown up. And a lot of the easy money has already been made.
That brings me to Micron Technology, Inc. (MU).
Micron is no longer hiding in the brush. The stock is up 325% year-to-date and 853% over the past year. It became a $1 trillion market cap company last month. And after this week’s blowout earnings report, it is quickly becoming one of Wall Street’s favorite AI stocks.
That did not happen by accident.
It happened because Micron is helping solve one of the biggest problems in artificial intelligence today: The memory bottleneck.
So today, we’ll dig into Micron’s blowout quarter, discuss why it matters and then talk about how my system is already helping me find winners from the next phase of the AI boom before the crowd catches on.
Micron Crushed Wall Street’s Expectations For the past few years, NVIDIA Corporation (NVDA) has been the grand finale of earnings season. But now, I believe Micron has taken that role.
Here’s why.
NVIDIA tells us how strong demand is for GPUs, the chips that power today’s AI systems. But Micron tells us whether those systems can get the memory they need to keep running at full speed.
Micron is one of the world’s largest makers of memory and storage chips. In plain English, its chips help computers and data centers store information, access it quickly and move it where it needs to go.
That may not sound as exciting as a cutting-edge GPU. But without memory, those GPUs cannot do their job.
Think of it like this: A GPU is the engine in a race car. Memory is the fuel line. You can build the most powerful engine in the world. But if the fuel line cannot deliver enough fuel, the engine cannot run at full speed.
That is the bottleneck AI is running into now. AI models are getting bigger. More companies are using AI in the real world. Data centers are being pushed harder. And all of that creates a need for faster, more advanced memory.
That is why Micron’s results matter so much.
The stock surged out of the gates Thursday morning after releasing blowout results for its third quarter in fiscal year 2026. Revenue jumped 73.8% year-over-year to $41.46 billion, while earnings surged a whopping 1,223.1% year-over-year to $28.86 billion, or $25.11 per share.
Wall Street was already expecting a strong quarter. The consensus estimate called for earnings of $20.71 per share on $35.82 billion in revenue. So, Micron posted a 21.2% earnings surprise and a 15.7% revenue surprise.
Micron also issued a stronger-than-expected outlook. For the fourth quarter in fiscal year 2026, the company expects total revenue of about $50 billion and earnings of about $31 per share. That would represent 342% year-over-year revenue growth and 923.1% year-over-year earnings growth.
That tells me this memory boom still has legs.
And management made clear why. The company noted, “Micron’s record fiscal third-quarter financial results and even stronger outlook for the fourth quarter reflect the strategic value of memory in the AI era.”
That last phrase is the key: The strategic value of memory in the AI era.
For years, memory chips were treated like a cyclical commodity business. Important? Yes. Exciting? Not really.
But AI has changed that. Today, memory is becoming one of the most important pressure points in the entire AI buildout. And Micron is standing right in the middle of it.
Is Micron Still Cheap? Now, I know what some folks are thinking: Can a stock be up this much and still be attractive?
That is a fair question.
For decades, memory was a brutally cyclical business. That’s why, just before to announcing earnings, Micron traded at just nine times forward earnings. That is far below Western Digital Corporation (WDC) and Seagate Technology Holdings plc (STX), which both trade at more than 36 times forward earnings.
The bears say that discount makes sense. They argue that memory is still memory, and this cycle will eventually turn.
I understand that argument, but there is a real case that this time is different.
Instead of short bursts of demand tied to PCs and smartphones, Micron is now tied to the ongoing buildout of AI data centers. And those data centers need massive amounts of high-performance memory.
Micron’s long-term supply agreements support that idea. MarketWatch reported that Micron has signed 16 strategic customer agreements, and 14 of them include pricing that represents about $100 billion in cumulative revenue, minimum.
That kind of visibility is something memory companies didn’t always have. So, there is a strong argument that this run may not be over yet.
The Trap Investors Need to Avoid That said, I have been around long enough to know what happens when a trade gets too crowded.
The more popular a stock becomes, the more crowded it can get. And in today’s market, crowding can happen faster than ever.
That is because millions of investors are now leaning on the same AI tools, the same AI-generated research, the same model portfolios and the same automated trading systems. So, when a stock becomes the obvious AI winner, the crowd can pile in all at once.
That can feel good for a while. It can push a stock higher. It can make everyone feel like they are on the right side of the trade.
But it can also create a dangerous setup.
When retail investors and AI-driven systems rush into the same obvious names, institutional investors often get the liquidity they need to sell into that demand. In other words, the crowd may be buying just as the smart money is quietly moving on.
That is the trap I want to help my readers avoid.
Again, Micron is a great company. I still like it. But the bigger lesson is that by the time a stock becomes obvious to everyone, the elephants of Wall Street may already be looking for the next opportunity.
That is why I do not want to chase the crowd. I want to look for the fresh tracks.
That is what my Precursor Intelligence (P.I.) system is designed to do.
P.I. is my way of looking for fresh tracks in the numbers. It helps me find companies with accelerating fundamentals and improving money flow before they become the obvious names every AI tool is recommending.
In my Accelerated Profits service, we have already seen this approach lead us to several powerful winners in the AI space, including:
Celestica, Inc. (CLS): – +836% Sezzle (SEZL): +up 625% TechnipFMC plc (FTI): +up 254% And more… These are the kinds of gains that can happen when you find the fresh tracks early, before the elephant steps into the clearing.
To further explain how my P.I. system works, I recorded a special presentation. I also discuss why AI-powered crowding could become a serious risk for investors and where I believe the smart money is moving next.
I also reveal several stocks my system is flagging right now.
You can click here to watch it now.
Sincerely,
Louis Navellier
Senior Investment Analyst, InvestorPlace
The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:
Celestica, Inc. (CLS), Micron Technology, Inc. (MU), NVIDIA Corporation (NVDA), Seagate Technology Holdings plc (STX), Sezzle, Inc. (SEZL) and TechnipFMC plc (FTI)
Memory chips are boring until they aren’t, and Wednesday afternoon they stopped being boring. Micron Technology (NASDAQ:MU | MU Price Prediction) guided fiscal fourth-quarter revenue to $50 billion, plus or minus $1 billion, against a Wall Street consensus parked around $43 billion.
Bloomberg Tech host Ed Ludlow, on Bloomberg Businessweek Daily, summed up the move with a line that did the rounds on every trading desk by Thursday morning. “It’s not about beating the expectations of the street. Micron reset the expectations of the entire industry.” The stock responded accordingly, closing at $1,213.56 on June 25, an all-time high and a 15.74% single-session move. Year to date, Micron is up 275%.
Why Ludlow called it a reset, not a beat Ludlow’s point was about the source of the dollars. The Q4 guide is being driven by tight supply conditions and pricing power, particularly in data center and high-bandwidth memory, with higher prices, not higher unit volumes, driving the gain. Supply is tight “and it’s going to be tight for a long time,” Ludlow noted, which hands Micron something memory companies almost never get to keep for long. Pricing power.
That framing matters because memory is a cyclical commodity business that periodically buries its participants. Ludlow flagged the flip side too. “Everyone wants the thing you’re selling,” but the same dynamic is “not good for the companies who are in the market trying to get hold of those chips.” Translation. Every hyperscaler building out AI infrastructure is paying up, and Micron’s revenue line is their margin compression.
The Q3 results under the hood The numbers Micron reported before the guide stole the show already stood out. Revenue of $41.46 billion against a consensus of $35.25 billion, growing 345.72% year over year. Non-GAAP EPS landed at $25.11, the seventh consecutive EPS beat. GAAP gross margin expanded to 84.6% from 37.7% a year ago, a margin profile software companies would envy. Operating cash flow hit $25.39 billion, free cash flow $18.30 billion, against capex of $7.83 billion.
Segment-wise, Cloud Memory at $13.77 billion overtook Core Data Center at $11.52 billion and Mobile and Client at $11.52 billion. AI accelerators eat HBM, and Micron’s HBM4 is already shipping in volume to its lead customer platform, with HBM4E targeted for calendar 2027 production.
What durability actually looks like CEO Sanjay Mehrotra spent his prepared remarks pushing one phrase, multi-year Strategic Customer Agreements. “We believe our multi-year Strategic Customer Agreements will significantly enhance the durability and predictability of Micron’s strong financial performance,” he said. The unsubtle message to investors who still mark memory stocks as cyclicals. This cycle has contracts attached.
The risks haven’t vanished. Q3 included a $325 million loss on debt prepayments, capex is running at record levels, and the lead HBM customer concentration is real. Reddit’s r/stocks crowd, which lit up at a peak sentiment score of 66 on Wednesday evening, had already cooled to neutral by Friday morning, with the most debated thread asking whether “Micron’s guidance is truly bullish for the overall market.”
Polymarket bettors, for what it’s worth, had already priced this in. The most recent MU earnings prediction market resolved decisively to “Up”. The harder question now is whether $50 billion quarters become the new baseline or the new high-water mark, and Mehrotra is betting his capex budget on the former.
Growth investors focus on stocks that are seeing above-average financial growth, as this feature helps these securities garner the market's attention and deliver solid returns. However, it isn't easy to find a great growth stock.
By their very nature, these stocks carry above-average risk and volatility. Moreover, if a company's growth story is over or nearing its end, betting on it could lead to significant loss.
However, it's pretty easy to find cutting-edge growth stocks with the help of the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the traditional growth attributes to analyze a company's real growth prospects.
Micron (MU - Free Report) is on the list of such stocks currently recommended by our proprietary system. In addition to a favorable Growth Score, it carries a top Zacks Rank.
Studies have shown that stocks with the best growth features consistently outperform the market. And for stocks that have a combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy), returns are even better.
While there are numerous reasons why the stock of this chipmaker is a great growth pick right now, we have highlighted three of the most important factors below:
Earnings GrowthArguably nothing is more important than earnings growth, as surging profit levels is what most investors are after. And for growth investors, double-digit earnings growth is definitely preferable, and often an indication of strong prospects (and stock price gains) for the company under consideration.
While the historical EPS growth rate for Micron is 3.2%, investors should actually focus on the projected growth. The company's EPS is expected to grow 662.5% this year, crushing the industry average, which calls for EPS growth of 72.1%.
Cash Flow GrowthWhile cash is the lifeblood of any business, higher-than-average cash flow growth is more important and beneficial for growth-oriented companies than for mature companies. That's because, growth in cash flow enables these companies to expand their businesses without depending on expensive outside funds.
Right now, year-over-year cash flow growth for Micron is 101.9%, which is higher than many of its peers. In fact, the rate compares to the industry average of 23.9%.
While investors should actually consider the current cash flow growth, it's worth taking a look at the historical rate too for putting the current reading into proper perspective. The company's annualized cash flow growth rate has been 14.7% over the past 3-5 years versus the industry average of 10.2%.
Promising Earnings Estimate RevisionsSuperiority of a stock in terms of the metrics outlined above can be further validated by looking at the trend in earnings estimate revisions. A positive trend is of course favorable here. Empirical research shows that there is a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
The current-year earnings estimates for Micron have been revising upward. The Zacks Consensus Estimate for the current year has surged 4.8% over the past month.
Bottom LineWhile the overall earnings estimate revisions have made Micron a Zacks Rank #1 stock, it has earned itself a Growth Score of B based on a number of factors, including the ones discussed above.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
This combination indicates that Micron is a potential outperformer and a solid choice for growth investors.
Listen below or on the go on Apple Podcasts and Spotify
Micron goes volatile on great news (0:20) SpaceX the bellwether (2:45) Fed interest rate commentary (4:40) Light week coming (7:11)
Transcript
Rena Sherbill: Brian Stewart, our director of news. Welcome back to another week of Wall Street Roundup. Are we starting with tech?
Brian Stewart: I think Micron (MU) was the big news this this time around so we should we should jump in there.
Market reaction was interesting, taking it in broad terms. Micron reported better than expected results, revenue more than quadrupled from last year to forty-one billion dollars about.
Strong guidance. They said AI demand is still accelerating, however, supplies remain tight. So basically the exact market you'd want for the company. Stock was up sixteen percent on earnings, but the follow-through through the sector in general was much more muted.
Also you're seeing a situation where Micron has gotten more volatile in recent days. It rallied on Monday, hit a new high, and then we had the general market sell-off, tech worry sell-off on Tuesday, which Micron was down pretty sharply, and then down double digits.
And then you saw the pop back up after the earnings. So you saw Micron set a new high on Monday, beat that new high right after its earnings. But then the stock is down today and is below where it was obviously at its high, but also below the high that it reached on Monday.
Meanwhile, you have other stocks. If you look at the the general tech space this time around, you take the the large cap winners in the past week, you see a very defensive situation. So you see Merck (MRK), J&J (JNJ), Lilly (LLY), Home Depot (HD), Coke (KO). These are the stocks that have been showing strength in the past week.
And then on the downside, you see stocks like (ARM) and Oracle (ORCL) and Palantir (PLTR). So basically your AI set falling behind. And that's despite the fact that you have Micron as a catalyst.
So the overall reaction to Micron, if you could summarize it, is something like this is an A +++ earnings report, could not be better. However, after some reflection, a lot of this was already baked into the style.
Rena Sherbill: So much is priced in. So much is priced in already.
Brian Stewart: That's worrisome if you're a bull, just in the sense that if a super blockbuster quadrupling of revenue earnings report is already priced into the stock, there's not a lot that isn't priced into the stock. So you're looking to a situation where one stumble could make a big downside.
Rena Sherbill: Check out Investing Experts Podcast to see what to do with your money instead of going into those stocks.
Update on SpaceX? Where are we at with it?
Brian Stewart: I remember a while ago we talked about Tesla (TSLA) every week and I think Elon Musk just has a gift for putting his stock top of mind all the time.
I think SpaceX (SPCX) is becoming a proxy for people's opinions about optimistic tech, future tech. The stocks that are more about promise than they are about the current revenue stream, I think SpaceX is becoming the bellwether for that.
Recently they priced IPO at $135 a share, it opened at $150, rallied to around $225, and now it's back down to just over $150. So it's basically back to where it started. Still above its IPO price, but in terms of where it opened, it's pretty much just on a round trip.
The catalyst for the recent dip has been it's selling twenty-five billion dollars in bonds. This is after it made eighty six billion dollars off of its IPO. So $75 billion in the initial, and then the overdraft for that got it up to eighty-six. So the company now has more than a hundred billion dollars in cash from from all these cash raises.
And I just think this played into the narrative of the hyperscalers flooding the market with these bonds. I just think there's a worry that this is all kind of frothy. There's a sign that maybe these companies are getting as much cash as they can at the top of the market. They know something we don't kind of thing.
So that was the initial catalyst for sending it down. If you look at the tech stocks in general, I thought Wedbush had an interesting way of framing it. They called it an air pocket market. So basically the pilot's coming on saying there's turbulence ahead, we're gonna stop beverage delivery or whatever they call it. I think that's the market we're in. Like buckle your seatbelts because we we might hit some pumps.
Rena Sherbill: To wit, OpenAI (OPENAI), I saw a report about them considering delaying their IPO due in part to the pullback in in SpaceX and investor sentiment, etc. Interesting to see various consequences from this frothiness.
We talked about it on this morning's Wall Street Breakfast podcast about Neel Kashkari coming out with some comments.
I don't know if you saw it, it just was released that widespread inflation led him to pencil in one interest rate hike this year in the Fed's June dot plot. So it now expects no reduction in its policy rate in 2026.
Any thoughts there?
Brian Stewart: I think it just highlights that interest rates are going to kind of take over. Well not take over, but I think co-lead for the movie that's going to be the stock market for the next few weeks is going to be AI and then interest rates. I think that's going to be the major debate.
Inflation has been stubbornly high. You see oil prices coming down sharply from their peaks because we've reached at least a temporary end to the Iran situation.
And so the the question is how much damage was done during the time period where the Strait of Hormuz was closed? Was it just a blip? Are we going to heal very quickly and get back to normal and start seeing inflation come down?
Or is that inflation still gonna work its way through the system and it's gonna be stuck high for a long period of time? The Fed has been in a wait and see mode lately though I think in Warsh's first meeting there were some hawkish signs, which is interesting because I think in the initial nomination process, there was hope that he was coming in as a dove.
Warsh seems to favor less communication. He's famously a skeptic of the dot plot. The statement that they issued was the shortest in recent memory. So it'll be interesting for the market to get used to less information from the Fed.
Now they'll still be - you're talking Kashkari, you're still gonna get that individual commentary from it, but you have to weigh those in, Kashkari can't make the decision on his own, right? This is a a team effort.
And so balancing the hawks and the doves and the different forces that go into this decision making, it's gonna get more complicated, or at least there's gonna be a learning curve as we get used to how the Fed is going to do its communications.
Rena Sherbill: What else you got for us this week? Or next?
Brian Stewart: Next week is gonna be pretty light. We got the the holiday at the end of the week. There's really not many earnings. We have Nike (NKE) coming out, so we're gonna get a little bit of information about the consumer.
We have General Mills (GIS), which is another kind of consumer data point coming out, and then not much else.
You have the jobs data coming out. I think that's gonna be a big one. Recent jobs data has pointed to a relatively healthy jobs market. So I think investors are gonna be looking to whether that holds up.
I think the worry there, it's kind of like good news is bad news situation. The the stronger the the job market is, the more of a green light the Fed has to raise rates to fight inflation. So the response, the market response to the jobs data might be counterintuitive in the moment.
We'll have to test what the market sentiment is. And so I think the jobs data will be a good point.
The rollercoaster ride that is investing in Micron (MU 2.87%) stock took another turn Friday, as shares of the computer memory maker slid 4% through 10:40 a.m. ET.
You can blame OpenAI for that.
Image source: Micron.
Easy come, less easy go Micron (MU 2.87%) blew past earnings estimates yesterday, setting a new all-time high share price and predicting even more gains in store in Q4. The stock closed Thursday up 15.7%, so while today's 4% subsidence is perhaps disappointing, it still leaves Micron stock worth considerably more than it was pre-earnings.
How long will this last, though?
As The New York Times reports, worries over the sudden downturn in the price of SpaceX (SPCX +2.89%) shares post-IPO have OpenAI rethinking whether now's really the right time for it to IPO. OpenAI's financial advisors are telling CEO Sam Altman he has to make a choice: IPO in 2027 and potentially secure a $1 trillion valuation for OpenAI -- or IPO in 2026 and risk a lower valuation.
Again, reportedly, Altman is intent on ringing the trillion-dollar bell and now leans toward postponing the OpenAI IPO.
Today's Change
(
-2.87
%) $
-34.83
Current Price
$
1178.73
What this means for Micron What does this have to do with Micron stock? Simply this:
OpenAI's last pre-IPO funding round valued it at $852 billion and raised $122 billion in cash. OpenAI's expected to spend most of this money renting computing capacity from hyperscalers, who in turn will spend heavily on computer chips and memory to outfit gigantic data centers to run OpenAI's artificial intelligence programs.
The same thing will happen when OpenAI raises perhaps even more cash at its IPO. But if OpenAI delays its IPO to 2027, it might also postpone its spending. This delays the windfall for hyperscalers, for chipmakers -- and for Micron, too.
That's why Micron stock is down today.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool has a disclosure policy.
A sharp sell-off in leading technology stocks reflects short-term impatience rather than any breakdown in the artificial intelligence trade, according to Wedbush.
The broker said core names driving what it calls the fourth industrial revolution, including Microsoft Corp (NASDAQ:MSFT), Alphabet Inc (NASDAQ:GOOG), Palantir Technologies Inc (NYSE:PLTR), Oracle Corp (NYSE:ORCL, XETRA:ORC), Nvidia Corp (NASDAQ:NVDA, XETRA:NVD), Amazon.com Inc (NASDAQ:AMZN) and Meta Platforms Inc (NASDAQ:META, XETRA:FB2A, SIX:FB), have come under heavy selling pressure, with investors treating Microsoft and Meta as if they were bear-market stocks that cannot be owned.
Wedbush, whose technology team is led by Dan Ives, said the moves amounted to a "Twilight Zone market" for many of the sector's biggest names, while beneficiaries such as memory chipmakers were thriving.
Micron Technology Inc (NASDAQ:MU) was singled out as one such winner over the past week.
The bank put the disconnect down to two main concerns weighing on the hyperscalers and Nvidia.
The first is the lag between Big Tech's enormous capital spending and any payoff in revenue.
Wedbush estimates the largest technology companies will spend around $700 billion on capital expenditure this year to build out AI infrastructure, leaving the sector in what it described as an "air pocket stage".
The broker said investors had grown frustrated with the patience required on Microsoft and Meta in particular, with the two now in a six to 12 month window during which data centre and compute buildouts are ramping up but the expected monetisation boom has yet to arrive.
Alphabet had been the standout performer in the group until recent weeks, when it lost several core engineers to Anthropic.
Meta, meanwhile, is attempting to overhaul its business through heavy investment that will take time to feed through to earnings.
Wedbush framed the situation as year three of a 10-year AI buildout, arguing the current weakness represented short-term pain for long-term gain and that the stocks now offered major buying opportunities.
The second concern centres on rising compute and memory costs, and whether they could reach a level that forces enterprises to slow their AI buildouts.
Wedbush said Apple Inc (NASDAQ:AAPL, XETRA:APC) price increases announced the previous day had sent a negative jolt through the market, feeding wider worries about the neoclouds and hyperscalers being left exposed in a game of musical chairs.
The broker expects those costs to ease over the coming year.
It argued that the present anxieties would fade once AI consumer hardware, physical AI deployments and enterprise use cases scaled up, comparing the buildout to the construction of the Las Vegas strip in the 1950s.
Wedbush concluded that the head-scratching moves across the sector were creating disconnects and opportunities to own the technology and AI winners in a multi-year bull market it believes still has considerable room to run.
Micron Technology, Inc. is delivering historic results amid an AI-driven memory shortage, with shares up over 700% in a year and trading at 10x forward earnings. MU's current valuation capitalizes peak-cycle earnings, ignoring the memory industry's deeply cyclical, commodity nature and history of sharp post-peak drawdowns. Massive new capacity investments by all three DRAM producers, including MU, are set to come online from late 2027, likely ending today's shortage and pressuring margins.
The market has rarely seen a technological revolution like the one the artificial intelligence boom has unleashed. Semiconductor companies, in particular, have been rewarded at a pace few investors have ever witnessed.
Last year, Nvidia (NASDAQ:NVDA | NVDA Price Prediction) dominated headlines as demand for AI accelerators exploded. This year, the spotlight has shifted to a different bottleneck: memory. Every AI server needs massive amounts of high-bandwidth memory (HBM), and there simply isn’t enough to go around. That shortage has transformed Micron Technology (NASDAQ:MU) from an important supplier in a cyclical industry into one of AI’s foundational infrastructure companies, and one of its most valuable.
The memory chipmaker’s latest earnings release suggests the story is far from over, even after one of the fastest wealth-creation periods the semiconductor industry has ever seen.
Micron’s Growth is Rewriting the AI Playbook Micron’s fiscal third-quarter results showed a company operating on an entirely different scale than it was just a year ago. Revenue climbed from $9.3 billion in fiscal Q3 2025 to $41.5 billion this year, a better than fourfold increase. Net income expanded even faster, jumping from $1.9 billion to $28.2 billion, up nearly 15 times — surpassing even Nvidia’s historic run one year earlier.
The stock has reflected that explosive growth. Micron’s market capitalization increased from roughly $140 billion in June 2025 to $1.31 trillion today — a near-tenfold increase.
The old investing maxim says stock prices ultimately follow earnings, and earnings follow sales. Micron’s valuation isn’t simply responding to higher revenue — it is rewarding a business that has dramatically expanded its profitability as rising memory prices flow directly to the bottom line.
Management forecast another quarter of powerful growth for fiscal Q4 as demand continues to exceed available supply. The shortage has become so severe that Micron says its HBM production is sold out through 2026; it can currently satisfy only about 50% to 66% of customer demand; and it has also signed 16 long-term customer agreements to lock in future supply years in advance.
Meanwhile, customers are already passing higher costs along. Apple (NASDAQ:AAPL) announced yesterday it was raising prices on select Macbook and iPad models, citing higher memory costs as the reason. CEO Tim Cook said, “We have never seen a component price increase this much, this quickly.” He has also likened the situation to a “100-year flood.” Microsoft (NASDAQ:MSFT) followed by increasing Xbox pricing.
Those announcements illustrate how pricing power has shifted toward memory manufacturers as AI infrastructure competes directly with consumer electronics for limited DRAM and HBM production. Even with Samsung, SK hynix, and Micron investing billions to expand capacity, building advanced memory fabrication takes years — not months.
Valuation Offers Significant Upside A stock that climbs nearly tenfold naturally raises concerns about whether investors have missed the opportunity.
Surprisingly, Micron still trades at roughly 8 times forward earnings, despite Wall Street forecasting approximately 165% average annual EPS growth over the next five years. Those figures suggest earnings are expanding even faster than the stock price.
That said, risks remain. Memory has historically been a cyclical business, and eventually new manufacturing capacity will reduce pricing pressure. The key question is when — not whether — that happens.
Key Takeaway Micron probably won’t deliver another tenfold return over the next 12 months. Markets rarely repeat that kind of performance back-to-back. Yet the company’s latest earnings release shows revenue, profits, and demand continuing to expand at extraordinary rates, while supply remains constrained.
With HBM sold out through 2026, long-term supply contracts in place, a deeply discounted stock valuation, and earnings still accelerating, Micron’s AI story appears driven by fundamentals rather than hype. For investors looking beyond the next quarter, the numbers still suggest the memory leader has plenty of room to grow.
HomePersonal FinanceAlso in Weekend Reads: Medicare and GLP-1s, tech stocks and career adviceJune 26, 2026, 12:47 p.m. ET
Micron’s stock typically trades on the cheap because investors have long memories of dramatic cycles of supply and demand in the market for computer memory chips and peripheral devices. The company’s sales for its most recent reported fiscal quarter were up 74% from the previous quarter and had increased more than fourfold from the year-earlier quarter. But less than three years ago, the company reported a fiscal 2023 net loss as its annual revenue declined 49%.
And even though its stock price has more than quadrupled this year, Micron’s MU forward price/earnings ratio of 9.2 is very low when compared with a weighted forward P/E of 20.2 for the S&P 500 SPX, according to FactSet.
1. Apple Stock Falls on Price Rises Apple (AAPL +1.10%) suffered its worst one-day stock fall in over a year yesterday, after the iPhone maker announced price increases – on just about everything except iPhones, for now. The soaring competition for memory chips in short supply was highlighted by Micron's (MU 2.66%) exceptional results yesterday. Apple's new pricing follows Microsoft's (MSFT +3.93%) Xbox price jumps.
"Micron's huge AI windfall is bad news for most of us": Bloomberg's Chris Bryant noted the huge memory demand from AI superscalers is likely to keep prices high until at least 2028, due to the long time it takes to get new chip factories running. Global tech stock sell-off: Asian markets fell this morning following the week's AI-led jitters, with South Korea's Kospi index plunging more than 8% in early trading while Japan's Nikkei lost 5%. The Nasdaq has fallen 4.4% so far this week – with futures down more than 1% this morning, while S&P 500 futures dipped 0.3%. 2. Why I'd Rather Call Market Drops "Opportunities" I recently passed the 30th anniversary of the date that I purchased my first stock (I was not raised in a house that knew anything about investing or owned stocks of any kind). In the three decades since I've (we've all) seen a LOT ... And through it all, the market is "up and to the right."
Investing is such a rewarding effort and, three decades into this adventure (and hoping for another three to four decades beyond today), I've personally seen and so benefited from the magic of compounding.
I thus find it rather difficult to get worked up about market drops. Indeed, at this point it's engrained in me to consider sell-offs as just another opportunity. After all, what do you think "long-term investment time horizon" means?
3. Report: OpenAI to Delay IPO?
OpenAI is considering delaying its much-anticipated stock market launch until next year, says The New York Times. The rethink follows June's tech stock slump, and the lackluster response to SpaceX's (SPCX 0.12%) record IPO – from a rapid rise to over $225, SpaceX stock closed yesterday down at $153. OpenAI filed a draft IPO earlier this month with the SEC, and analysts had expected a launch in the third or fourth quarter.
Trillion-dollar valuation: Faced with a suggestion to delay until 2027 or lower OpenAI's target valuation, CEO Sam Altman called the latter a non-starter, according to the Times report. SoftBank stock plunges 12%: SoftBank, a major OpenAI backer with a stake worth an estimated $65 billion, experienced its biggest intraday stock fall in more than three months in Tokyo this morning as hopes for a quick IPO windfall fade. 4. Today's Take: AI Investing Lessons From History
As gravity is to physics, corrections are to markets. Balance must be – and will be – restored. Data companies hold the information that can drive balance-restoring efficiency, and it's why I still like and have meaningful stakes in MongoDB (MDB +3.60%) and Snowflake (SNOW +2.70%).-- Tim Beyers Team Rule Breakers
5. Your Take Which companies that you already have a position in are you considering adding to your portfolio soon, and why?
Discuss with friends and family, or become a member to hear what your fellow Fools are saying!
This image and article was created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Micron Technology, Microsoft, MongoDB, and Snowflake. The Motley Fool has a disclosure policy.
Stock News Global tech stocks tumble on AI spending and IPO delay: Major indices and tech shares, including Apple (AAPL), Alphabet (GOOGL), Microsoft (MSFT), an
Micron’s stock is still dirt cheap. Some analysts say that’s about to change.
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HomeIndustriesComputers/ElectronicsTech StocksTech StocksNew long-term customer agreements could bring more predictability to Micron’s financials, addressing a persistent investor concern about sustainabilityJune 26, 2026, 8:03 a.m. ET
Micron Technology’s stock remains very well-priced despite its explosive rally this year, but some analysts think it could soon break out of the bargain bin.
Shares of Micron MU trade at a forward price-to-earnings multiple of 9.2x, not much higher than the 8.3x multiple they fetched at the end of 2025, according to data provided by FactSet. While Micron has seen its stock price climb 325% so far this year, the pace of growth in rolling 12-month earnings-per-share estimates has been nearly as strong, at 284%.
About the Author
Emily Bary is MarketWatch's managing editor for companies coverage. She is based in New York.
Philip van Doorn writes the Deep Dive investing column for MarketWatch.
