Track market-moving stories before they get noisy

On CNBC's “Halftime Report Final Trades,” Bryn Talkington, managing partner of Requisite Capital Management, picked Uber Technologies, Inc. (NYSE:UBER).

Investors can sometimes get great news from unexpected places. While investors typically focus on a company's earnings reports and press releases when assessing a stock's potential, it's also worth paying close attention to what others in the industry are saying.

Micron Technology (MU +2.77%) is a great example of a company where it's arguably more important to determine what lies ahead amid the memory shortage than anything else; investors know the current results are going to be strong. The big question is: how long is the shortage going to drag on? Management will likely have a rosy forecast, but when others in the industry also have a promising outlook, that can be the confirmation investors need to remain bullish on the stock.

Last week, Micron investors received terrific news from Intel (INTC +12.14%) CEO Lip-Bu Tan, who expects the memory shortage to be even worse next year.

Image source: Getty Images.

Memory prices could continue risingMany CEOs have been complaining about rising memory prices impacting their products. According to Tan, who says he correctly predicted this year's bottleneck, "next year is going to be even worse."

For Micron investors, this is great news, as it means prices may remain elevated and continue rising into next year. That's likely to result in stronger sales and earnings, potentially setting up an even stronger year for Micron in 2027.

Currently, the stock is trading at an incredibly low forward price-to-earnings multiple of less than seven. That's based on analyst expectations and hinges on the assumption that demand will remain insatiable and that Micron's profits will continue to soar. Many investors, however, have remained cautious because demand for memory and storage products has historically been cyclical, with the fear that if a slowdown comes, these types of stocks could crash.

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Is Micron's stock a slam-dunk buy right now?News of the memory shortage potentially getting worse next year is great for Micron investors, but it also isn't exactly a new development. There have been reports that the memory shortage might span multiple years, and thus, this might not have a game-changing impact on the tech stock.

Micron's stock has soared more than 260% this year, yet its valuation still doesn't look expensive given how well the business has been performing. But while it has the potential to rise further due to strong earnings, investors should be careful not to buy and forget about Micron's stock, as things can change quickly in the tech sector. Despite its low valuation, this can still be a risky and volatile holding.

"This latest move up today shows there is additional blue sky" for AI chips, says Futurum's Brendan Burke. Even after Anthropic and OpenAI leaders expressed concerns of AI developing too fast, he believes the AI trade will not slow down.

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Micron (MU)

Buy MU. The thesis is durable HBM/advanced DRAM pricing power: hyperscaler demand is outstripping foundry cleanroom + advanced packaging capacity through 2027, and next-gen HBM4 bit pricing could double in CY2027 contract talks—supporting gross margin expansion and a beat-and-raise setup into the Sept 30 quarter.

Key Risk: AI memory demand falls faster than supply constraints ease, forcing MU to cut prices and margins despite capacity bottlenecks.

HBM supply chain (ASML)

Buy ASML (ASML). Second-order: if HBM4 pricing and volumes rise, the whole bottleneck shifts to lithography and leading-edge equipment spend. More advanced memory ramps mean more EUV/High-NA demand and stronger order visibility for ASML even if MU’s stock is already priced for earnings.

Key Risk: HBM capex slows because hyperscalers delay AI infrastructure spending, reducing leading-edge equipment orders.

Micron MU shares are extending gains on Monday morning after a senior Stifel analyst said they are worth buying ahead of the company’s much-anticipated fiscal Q4 earnings.

In his research note, Brian Chin maintained his Buy rating on the memory chips specialist, with a $1,500 price target indicating significant upside potential from current levels.

His bullish call is particularly significant given Micron stock has been in a sharp uptrend in 2026, currently trading at more than 3x its price at the start of this year.  

At the heart of Stifel’s continued conviction is Micron’s formidable “pricing power” within High Bandwidth Memory (HBM) and advanced DRAM markets.

Chin recommends owning MU shares because average selling prices (ASPs) are experiencing an enduring tailwind as enterprise demand from hyperscalers significantly outstrips available foundry cleanroom capacity and advanced packaging lines.

Stifel highlighted that bit pricing for next-gen architectures like HBM4 could potentially double during upcoming CY2027 contract negotiations, providing a solid gross margin expansion catalyst.

Unlike prior cyclical downturns where sudden inventory gluts eroded profitability, the current AI infrastructure buildout has locked in robust pricing power well into the medium term, guaranteeing exceptional revenue acceleration.

Market jitters regarding competitive risks – such as recent headlines surrounding mass production milestones from Chinese manufacturer ChangXin Memory Technologies (CXMT) – haven’t done much to derail Stifel’s long-term thesis.

According to its analyst Brian Chin, severe lithography equipment lead times, rigorous technical qualification hurdles, and completely sold-out global HBM capacities through 2027 effectively insulate Micron shares from near-term market share displacement.

Unless industry-wide wafer supply growth unexpectedly accelerates beyond 40%, the structural deficit in high-performance memory chips will persist.

This formidable bottleneck immunizes Micron Technology Inc against external pricing pressures, ensuring that the firm’s revenue streams remain fiercely defended by insurmountable technological barriers to entry, he added.

As Wall Street ticks down the final days to Micron Technology’s highly anticipated September 30th  quarterly print, expectations are reaching a fever pitch for a decisive beat-and-raise performance.

Consensus is for the artificial intelligence chipmaker to record $31.24 per share of earnings (EPS) for its fiscal quarter, which would represent about a 10x growth on a year-over-year basis.

Beyond immediate trading catalysts, such as broader macroeconomic tailwinds following recent Federal Reserve rate cuts and steady short-covering momentum, institutional sentiment remains firmly anchored by the multi-year visibility of Micron's operational runway.

While high-beta tech names remain inherently susceptible to macroeconomic volatility, MU stock's indispensable position at the epicenter of the global AI hardware revolution sets the stage for a resilient finish to fiscal 2026 and an exceptionally lucrative trajectory into the years to come.

Micron (MU +2.40%), one of the world's largest memory chipmakers, has been a major beneficiary of the AI boom. After suffering a severe slowdown in fiscal 2023 (which ended in Aug. 2023), its revenue surged 62% in fiscal 2024 and 49% in fiscal 2025.

Micron's sales of high-bandwidth memory (HBM) DRAM chips and NAND chips for enterprise solid-state drives (SSDs) in AI clusters in data centers fueled that growth, and that momentum should continue for the foreseeable future. Analysts expect its revenue to soar 248% in fiscal 2026, 91% in fiscal 2027, and finally cool down to 14% growth in fiscal 2028.

Image source: Getty Images.

That's why Micron's stock has rallied more than 1,000% over the past two years. But at $1,040 per share, it still looks surprising cheap at just six times next year's earnings. Let's see if Micron is still an undervalued growth play -- and where it might head over the next 12 months.

Why is Micron's business booming? Micron isn't the world's largest producer of DRAM and NAND chips, but it generally produces more power-efficient chips than its larger competitors, Samsung and SK Hynix (SKHY +0.24%). As a U.S. chipmaker (which splits its manufacturing between its Asian and domestic fabs), Micron's business is partly subsidized by the U.S. government.

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Over the past three years, Micron's HBM DRAM chips -- which stack layers of memory chips vertically to achieve higher data transfer speeds for AI applications -- skyrocketed. These chips are directly paired with Nvidia's (NVDA +1.64%) data center GPUs to train AI clusters. To store all of that information, those data centers bought more enterprise SSDs from Micron.

HBM chips require triple the wafer capacity of a standard DRAM chip, so their increased output throttled the production of Micron's lower-end chips for PCs and servers. That bottleneck drove up prices for all DRAM and NAND memory chips, and Micron's sales skyrocketed.

Micron's stock trades at such a low multiple because it's still valued as a cyclical chipmaker. But if the AI boom lasts much longer than Micron's previous boom-and-bust cycles -- which mainly revolved around the PC and smartphone markets -- it could command a higher valuation.

Assuming Micron matches Wall Street's estimates through fiscal 2028 and still trades at six times forward earnings in a year, its stock would rise about 8% to $1,120 over the next 12 months. But if it trades at a more generous 10 times forward earnings, its stock could rise by another 80% to about $1,870. So even though Micron probably won't replicate its massive gains from the past two years, it still has plenty of upside potential if the AI boom continues.

One of the biggest beneficiaries of the artificial intelligence boom has been Micron Technology (MU +1.59%). Among the "big three" global players that can produce advanced DRAM memory, Micron's financial profile has improved significantly, thanks to the insatiable memory appetite of AI systems. And as the AI era moves from the generative to the agentic phase, these demands seem only set to increase.

Of course, that has also been reflected in Micron's stock price, which has delivered a 1,300% total return over the past five years -- that's a fourteen-bagger.

After that big a run, is this high-flying stock still a buy? Micron reports its fiscal fourth-quarter earnings on Sept. 30. Here's what to look out for.

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Micron still trades at a low P/E Today, Micron currently trades at 22.9 times trailing earnings but just 6.6 times the earnings estimates for the upcoming fiscal year, which ends in August of 2027. The reason for the low forward P/E ratio is that Micron has traditionally been a highly cyclical business, and investors fear that next year's huge earnings estimates will mark a peak in this cycle.

There are a few reasons for this. First, memory cycles typically only last two years or so, and the monster up-cycle for memory really began about a year ago, making next year's earnings the culmination of the past two-year cycle. So, investors scarred by past memory cycles are wary of bidding Micron higher.

Micron and its major competitors have also invested heavily in new memory plants slated to come online in 2028, increasing supply. Micron, for its own part, has six new fab projects in development in addition to expansion plans at its current facilities. Its massive new Idaho fab will come online next year and begin producing DRAM wafers in 2028. Micron's main Korean competitors are also building new memory fabs, which will begin coming online in 2028 and 2029.

That incoming supply is one concern, especially if AI companies figure out a way to use less memory going forward. Already, it appears that Nvidia (NVDA +0.48%) has "down-spec'ed" the memory requirements for its upcoming Rubin systems to 4-hi high-bandwidth memory (HBM), down from the originally planned 8-hi or 12-hi. This is because HBM is becoming very expensive, and higher-stack sizes may become uneconomical for many workloads.

Massive supply, combined with potentially lower training memory requirements, could lead to oversupply.

Image source: Getty Images.

But there is also a bullish scenario Even if new-age AI systems "down-spec" their HBM to only 4-hi from 8-hi, that doesn't necessarily mean that the up-cycle is over. After all, memory is in an absolute shortage right now, with some industry experts believing growing demand is two to three times higher than supply, while others think it may be as much as 10 times higher.

Even 4-hi HBM also takes a lot of capital equipment, at least three times more than traditional DRAM, which in turn detracts from the supply of traditional DRAM bits. Therefore, it may still be hard for supply to catch up with demand, even with the new supply coming on in 2028 and 2029. On the last earnings call in June, Micron CEO Sanjay Mehrotra admitted that the company had no line of sight to when supply would catch up to demand. Other industry executives have said that shortages will last through 2030.

Many customers have now signed up for long-term, take-or-pay agreements, often lasting up to five years, with obligations to buy a specified amount of bits at price floors from Micron. That is also a big difference between today's environment and past cycles, when memory pricing could soar or crash in any given year.

What to watch for On the last earnings call, Micron's management noted that it was targeting locking in 50% of its revenue under these LTAs. As of last call, it had already secured roughly 20% of its DRAM bits and 33% of NAND bits under LTAs. So, investors should look for progress on that front. Similarly, look out for commentary on Nvidia's down-spec'ing to 4-hi HBM for its upcoming Rubin systems, and what Micron management says about how that may affect demand.

Finally, since Micron had taken CHIPS Act funding for its new U.S. fabs, it has been restricted from executing share repurchases. However, Micron will be able to buy back stock beginning on Dec. 9. Investors should look for commentary on any share repurchase plan to be executed on that date.

Micron is a hold, but a buy for those without exposure The memory business has traditionally been highly volatile, making it difficult to assess Micron's earnings growth in any given year. However, the presence of HBM for generative AI systems, as well as these new long-term take-or-pay agreements with customers, could extend this cycle much further. As such, there is a wide range of possibilities for Micron's earnings power over the next few years.

If Micron's earnings power reverts to its pre-2024 level, the stock could retreat significantly. However, there is also a good chance that this new, higher level of earnings power will be sustained for quite some time. If that's the case, then Micron could be significantly undervalued.

Investors already holding a position should continue to hold, and listen for positive or negative comments on the topics above on Sept. 30. However, those without a position should consider taking a small starter position, as the upside could still be substantial, even after the stock's multiear run.

Micron (MU) remains fundamentally strong, with FY26 revenue set to surge from $37B to ≈$129B and robust forward demand. Strategic take-or-pay agreements and industry shortages underpin a bullish thesis, with new capacity and volume growth driving the next leg. I raise my price target from $1,750 to $2,050 (13.1x FY27 EPS), citing continued demand-supply imbalance and margin resilience.

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As Micron Technology, Inc. (Nasdaq: MU) stock attempts to break a major 12-month resistance level, up more than 14% over the past 5 days, Wall Street analysts expect a rally through this supply range and reach a new all-time high (ATH) by September 21, 2027.

As of September 21, 2026, 30 Wall Street analysts have set an average 12-month price target for MU stock at $1,564.44, according to data from TipRanks, which based its survey on ratings given over the past three months. 

MU stock forecast 2026. Source: TipRanks With Micron stock trading at $1,053.10 at the time of writing, these analysts are signaling a potential 48.58% upside over the next 12 months. 

Out of the sampled experts, the highest 12-month MU stock forecast is $2,200, from Ben Reitzes, an analyst at Melius Research. Meanwhile, James Schneider, a researcher at Goldman Sachs Group Inc. (NYSE: GS), holds the lowest 12-month price target for Micron stock at $1,100.

Is MU a good stock to buy? Earlier on Monday, Brian Chin, an analyst at Stifel Nicolaus, reiterated a ‘Buy’ rating for MU stock, according to a note Finbold analyzed. Chin also maintained the firm’s 12-month price target for Micron at $1,500, thereby predicting a possible 42.44% rally.

He based his bullish thesis for MU stock over the next 12 months on the company’s exceptionally strong fundamentals, superior pricing dynamics, and an underappreciated multi-year memory upcycle. Furthermore, this analyst anticipates Micron’s upcoming fiscal fourth quarter (F4Q) and F1Q financial results and forward guidance to surpass both Stifel Nicolaus and broader market consensus estimates. 

On the risks to watch out, this firm believes that Dynamic Random-Access Memory (DRAM) shipment growth is expected to moderate to a sustainable 15 to 20% rate in calendar year (CY27).  Nonetheless, Chin highlighted that due to tight artificial intelligence (AI) equipment availability and cleanroom timing, market supply will remain severely constrained unless supply growth surges beyond 40 and 50%. 

Micron stock price performance Over the past 12 months, MU stock has rallied more than 539%, thereby pushing the company’s market capitalization to $1.1 trillion. 

Micron’s 12-month chart. Source: Finbold As Micron stock printed its highest 30-day level earlier today, Wall Street analysts’ target could materialize, if MU’s uptrend continues over the coming months. 

Featured image via Shutterstock

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Microsoft's (MSFT -0.80%) fiscal 2026, which ended June 30, was arguably the strongest year in the software giant's history. Revenue grew 18% to $331.8 billion. Net income jumped 31% year over year, to $133.7 billion.

Micron Technology (MU +3.92%) is approaching that number from a different direction. The memory specialist earned $8.5 billion in its fiscal 2025.

But for the fiscal fourth quarter of 2026, which ended in early September, management guided to earnings of $30.73 per diluted share, plus or minus $1.00, on a generally accepted accounting principles (GAAP) basis. On about 1.15 billion diluted shares, the guidance works out to about $35 billion of profit in one quarter (about four times what the whole prior fiscal year produced).

Here's my prediction: In fiscal 2027, Micron will earn more than Microsoft. That means beating the year Microsoft is now in, not the one it just reported. It's a bold call, and it relies almost entirely on the price of memory.

Image source: Micron.

A $35 billion quarterMicron's net income was $13.8 billion in the fiscal second quarter of 2026. By the fiscal third quarter (the period ended May 28, 2026), it had hit $28.2 billion. And the new guide indicates a further jump of about 25% from that level, down from more than 100% sequential growth the previous quarter. The dollars keep growing even as the climb slows.

Price, not volume, is doing the work. Average selling prices for DRAM rose in the low-60% range from the quarter before, as reported in Micron's most recent quarterly filing, while shipment volumes increased only a low-single-digit percentage. Micron's gross margin, 37.7% in the prior-year quarter, reached 84.6% in the fiscal third quarter. Put another way, the company is selling only slightly more memory than it did the previous quarter, at far higher prices.

The company releases the quarter's actual results on Sept. 30.

Microsoft's fiscal 2027 is the real barThe two companies follow different calendars. Microsoft's fiscal 2027 started in July and runs through next June, while Micron's fiscal 2027 began in early September and runs through about August of next year.

Four quarters at the guided pace would amount to about $141 billion. That would beat Microsoft's fiscal 2026 -- and it's worth pointing out the $133.7 billion Microsoft reported included about $5 billion of gains on its OpenAI investment.

The real bar is higher, though. For one thing, the quarter Micron just guided has 14 weeks in it rather than the typical 13, because fiscal 2026 was a 53-week year. Account for the additional week, and the guided pace points to a figure closer to $131 billion over a normal 52-week year.

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And Microsoft won't stand still. Even if the technology company's profit growth slows to half of last year's 31% rate, its fiscal 2027 could still come in around $154 billion.

Put those together, and Micron has to average about $38 billion to $39 billion of net income a quarter over fiscal 2027, around 10% more than the guided quarter, with one fewer week to do it in.

Can memory prices hold?Micron can clear that bar without memory prices surging further. But it does need them to hold somewhere close to record levels while it sells more bits. The company is investing heavily to expand supply, and it's been signing multi-year take-or-pay agreements that bind customers to buying set volumes.

"We believe our multi-year Strategic Customer Agreements will significantly enhance the durability and predictability of Micron's strong financial performance," said CEO Sanjay Mehrotra in the company's fiscal third-quarter earnings release.

To be sure, memory prices have moved the other way before. As recently as fiscal 2023, a supply glut cut Micron's revenue almost in half, to $15.5 billion, and produced a $5.8 billion net loss. Even a small pullback in prices could put the whole call out of reach.

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Memory prices are not the only factor to monitor. Unions that represent most of Micron's employees in Taiwan, its biggest manufacturing center, have been pushing for a profit-sharing plan and keeping strike preparations alive, Reuters reported in mid-September. No strike has been called, and production has not been affected.

Even so, I think the situation favors Micron here. Prices don't need to rise further. But they do need to avoid collapsing -- and Micron's latest quarterly filing says most of these agreements set fixed or floor-and-ceiling prices, which would cushion the company if they did.

Will Micron out-earn Microsoft in fiscal 2027? I believe it will, by a slim margin -- so long as memory prices hold.

In the end, this is a profit ranking, not a stock call. Microsoft is worth about three and a half times what Micron is worth, and memory profits have historically been the less durable kind.

Nvidia (NVDA +1.34%) and Micron Technology (MU +3.92%) are two of the biggest companies in the world. Nvidia holds the top spot, sitting at a $5.3 trillion valuation. Micron currently sits at 13th place worldwide, with a $1.1 trillion valuation. These companies are also two of the biggest beneficiaries of the artificial intelligence (AI) build-out, and with that expected to ramp up again in 2027, these two are in a prime position to benefit.

But which stock stands to benefit more? Let's take a look at these two and see which stock makes the most sense for your investment dollars.

Image source: Getty Images.

Nvidia is a Micron client Nvidia and Micron are partners in the AI arms race. Micron makes memory chips, including DRAM memory that's utilized inside Nvidia GPUs. Micron's DRAM chips are also utilized in several other competitors' products, and demand for these products continues to rise.

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Nvidia forecasts that the big five AI hyperscalers will spend nearly $800 billion on data center capital expenditures during 2026. Next year, that figure is projected to rise to $1.3 trillion. That's a lot of GPUs from Nvidia, filled with memory chips from Micron. There is huge demand for each company's product, but there is a stark difference in the long-term demand curve for each.

Part of the reason Micron is among the best-performing stocks in the market this year is the supply state of the memory chip industry. Currently, demand outpaces supply, which is causing a price crunch in the memory chip market. This is causing Micron's downstream clients to pay more for the product, while Micron makes a fortune on higher prices. This effect will last until more supply is available or demand falls. With demand continuing to rise, the only logical path is for supply to increase, and Micron is doing so by building more production facilities, which are likely to come online sometime in mid-2027 and throughout 2028. However, Micron's management team has told investors that they shouldn't expect the tightness in the memory chip market to subside until 2028.

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That places Micron in the driver's seat through 2027, giving it the edge over Nvidia.

Winner: Micron

Nvidia and Micron both expect huge growth next year During Nvidia's latest conference call, it made the bombshell announcement that it expects 70% revenue growth next year, far exceeding analyst expectations. Micron hasn't given any forward guidance, but with the memory chip market still constrained, it's likely to be another banner year. Wall Street analysts estimate Micron will put up 88% growth, edging out Nvidia.

Both are expected to grow at a strong pace next year, although Micron still has the edge here.

Winner: Micron

Micron is far cheaper than Nvidia Micron and Nvidia operate on separate fiscal calendars. Micron's fiscal year begins in September, while Nvidia's starts in February. That makes it a bit hard to directly compare valuations, but there's enough information here to give investors a general picture. Micron trades at a dirt cheap 6.25 times fiscal year 2027 earnings.

MU PE Ratio (Forward) data by YCharts

Nvidia trades at an also-cheap 14 times fiscal 2028 earnings (ending January 2028), giving Micron the edge in this category, too.

NVDA PE Ratio (Forward 1y) data by YCharts

So, Micron is cheaper, growing faster, and its industry is expected to boom in 2027 more than Nvidia's. That should make Micron a no-brainer over Nvidia, right?

I think the key here is 2027 versus the next three years. In 2027, I fully expect Micron to be a better stock to own than Nvidia, although they are both fantastic investments. However, once the memory chip supply crunch is sorted out, Nvidia's high demand will remain while Micron's may falter or take a step back.

So, if you're looking for immediate upside, Micron is the best bet. If you're looking for better performance over the next three to five years, then I think Nvidia is the better pick.

Key Takeaways Q3 earnings for the S&P 500 index are currently expected to grow 24.0% YoY on 11.4% higher revenues.Tech. remains a heavy contributor to the growth profile, though momentum is broad-based. The Q3 earnings season will pick up notable steam with the release of the big banks' results in mid-October. The overall setup remains very favorable as we start looking ahead to the Q3 earnings season. S&P 500 earnings are expected to increase by +24% from the same period last year, the 8th straight quarter of double-digit earnings growth for the index.

The Tech sector remains a major growth contributor, but momentum is broad-based, with 14 of the 16 Zacks sectors on track to enjoy positive earnings growth in Q3. Importantly, the revisions trend remains positive and broad-based, highlighting a steadily improving outlook.

The quarterly chart below details actual results alongside Q3 2026 growth expectations and forward projections.

Image Source: Zacks Investment Research

As noted earlier, the revisions trend has been positive, sustaining the favorable trend in place for almost a year now. The chart below shows how 2026 Q3 earnings growth expectations have evolved lately.

Image Source: Zacks Investment Research

This positive revisions behavior is not a new development; they extend a tailwind that has been building for nearly a year. Historically, these upward adjustments were tightly concentrated in Technology and, more recently, Energy following Middle East supply disruptions. However, for Q3 2026, the constructive estimate revisions have broadened significantly, rising across 8 of the 16 Zacks sectors—including Transportation, Finance, Aerospace, Industrials, Utilities, and Autos alongside Tech and Energy.

On the negative side, Q3 estimates have been under pressure for these 8 sectors since the quarter got underway – Conglomerates, Basic Materials, Consumer Staples, Consumer Discretionary, Medical, Business Services, Retail, and Construction.

Sector Focus: Broad-Based StrengthQ3 earnings are expected to be above the year-earlier level for 14 of the 16 Zacks sectors, with 5 sectors expected to enjoy double-digit growth. The Conglomerates sector is the only one expected to have lower earnings in Q3 relative to the same period last year (down – 35.4%), while earnings for the Consumer Staples sector are expected to be flat.

The 5 sectors expected to enjoy double-digit earnings growth in Q3 are Aerospace (up +159.3%), Energy (+111.9%), Tech (+41.9%), Basic Materials (+31.2%), and Transportation (+15.1%).

Q3 earnings growth for the S&P 500 index drops to +20% from +24% once the Energy sector’s contribution is excluded from the index. Excluding the Tech sector, Q3 earnings growth for the rest of the index drops to +14.4%.

The chart below shows the Q3 earnings and revenue growth expectations for the Tech sector relative to what we saw from the sector in the preceding two periods and what is expected in the following three quarters.

Image Source: Zacks Investment Research

Nvidia (NVDA - Free Report) and Micron (MU - Free Report) have been enjoying a record earnings run in recent quarters, and that performance continues in Q3 as well.

Nvidia’s Q3 earnings are expected to increase +90% year-over-year on +91.2% higher revenues, while the year-over-year earnings and revenue growth rates for Micron are expected to be +938% and +348.6%, respectively.

Q3 earnings growth for the Tech sector gets cut by slightly more than half once contributions from Nvidia and Micron are excluded, as the chart below shows.

Image Source: Zacks Investment Research

Q3 Earnings Season ScorecardThe Q3 earnings season will get the spotlight when the big banks report on October 13th, but the reporting cycle actually got underway with the September 10th quarterly releases from Oracle and Adobe.

The Oracle and Adobe reports were for these Tech companies’ fiscal quarters ending in August, which get counted as part of the September-quarter tally. Homebuilder Lennar has since become the third S&P 500 member to report such Q3 results.

We have an additional six index members on deck to report their fiscal August-quarter results this week, including Costco, AutoZone, Darden and others.

Total Q3 earnings for the three S&P 500 members that have reported results already are up +22.6% from the same period last year on +14.9% higher revenues, with 33.3% beating EPS estimates and 66.7% besting revenue estimates.

The comparison charts below show the earnings and revenue growth rates for these companies compared to other recent periods.

Image Source: Zacks Investment Research

The comparison charts below show the Q3 EPS and revenue beats percentages for these companies compared to other recent periods.

Image Source: Zacks Investment Research

The Earnings Big PictureThe chart below shows the aggregate growth picture for the S&P 500 index on a calendar year basis.

Image Source: Zacks Investment Research

For a detailed view of the evolving earnings picture, please check out our weekly Earnings Trends report here >>>> A Broad-Based Earnings Growth Picture As Revisions Stay Positive 

Micron Technology MU shares rose on Friday as RBC Capital Markets said the memory-chip maker's valuation does not fully reflect its exposure to the artificial intelligence-driven memory boom.

Micron stock gained as much as 3.12%. RBC analyst Srini Pajjuri reiterated an Outperform rating and a $1,500 price target.

Pajjuri pointed to rising memory requirements from AI workloads, including the shift towards more memory-intensive agentic AI applications.

RBC said memory demand continues to exceed available supply, with several structural constraints contributing to the imbalance.

These include rapid growth in high-bandwidth memory (HBM), limited clean-room capacity and tight availability of extreme ultraviolet (EUV) equipment.

HBM has become increasingly important for AI accelerators because it can provide high memory bandwidth for demanding AI workloads.

The expansion of agentic AI could further increase memory requirements as AI systems become capable of operating with greater autonomy and handling multiple tasks.

A Seeking Alpha report also argued that AI is changing the historical cyclicality of memory demand.

Memory consumption has traditionally been driven by equipment volumes and increasing memory content per device, making the industry sensitive to hardware replacement cycles.

However, Micron's margins have shown a prominent upward trend since 2022, while the company has also repeatedly exceeded market expectations in recent quarters.

Micron is scheduled to report its next results on September 30.

Despite the tight supply-demand environment, RBC said Micron's valuation remains relatively modest.

According to Pajjuri, Micron trades at approximately 6.5 times expected forward earnings. He said this valuation gives limited credit to the company's Strategic Customer Agreements and floor pricing agreements.

RBC believes the combination of sustained AI demand, structural supply constraints, and customer agreements could support an expansion in Micron's valuation multiple.

Long-term contracts are becoming increasingly important in the memory industry.

Micron and its peers are securing agreements that establish future purchasing commitments for DRAM and NAND products.

These arrangements can provide greater visibility into future demand while reflecting the tight conditions across the memory market.

The memory industry's supply response is constrained by the time required to expand physical capacity.

New facilities require construction, equipment installation, qualification, and increases in production throughput, which can extend the period before additional supply becomes available.

There is also high barriers to entry and a relatively small number of competitors with global scale and experience through previous industry downturns.

Capital allocation decisions have increasingly been driven by expected returns rather than attempts to gain market share through higher production volumes.

This dynamic has contributed to a gap between memory supply and demand and supported higher memory prices.

AI workloads could add another structural source of demand as larger models, wider context windows and more advanced reasoning capabilities require greater memory capacity.

For Micron, the combination of AI-driven consumption, tight industry capacity and longer-term customer agreements remains central to the outlook ahead of its September 30 earnings report.

Micron Technology (MU +2.28%) has produced phenomenal results for investors amid the artificial intelligence (AI) boom. The stock has climbed around 500% over the past year, driven by incredible earnings growth. A surge in demand for memory chips has sent prices through the roof, while Micron and its competitors have taken a cautious approach to expanding supply capacity.

With expectations for semiconductor spending to keep climbing through the end of the decade, investors may be wondering if Micron still has significant upside from here. You can buy a share of the stock for about $950 today. Here's my prediction for how much that share will be worth by 2030.

Image source: The Motley Fool.

How long will the AI supercycle last? The memory market remains in a severe shortage, and Micron's management expects this to last through 2027. Rival SK Hynix (SKHY +1.49%) thinks the shortage could last through 2030. There are already signs, however, that the market is approaching equilibrium.

Price increases are slowing down. That's a result of some customers no longer being able to support higher memory chip pricing and of Micron and its competitors' moves to sign long-term agreements that lock in pricing bands. It's worth noting that if SK Hynix were confident that the market would remain supply-constrained and could support higher pricing through 2030, it wouldn't sign five-year contracts capping pricing at today's rates.

Tech industry analyst company TrendForce expects the price of dynamic random access memory to increase just 13% to 18% sequentially in the third quarter, ending this month. That's down from 53% to 58% growth in the second quarter.

As more supply comes to market, prices will come down, and Micron and other memory chipmakers may be able to offset lower prices with volume. However, the cyclical nature of the market should result in a drop in revenue at some point, even if demand and volume continue to climb. Analysts expect revenue to peak in 2028, followed by a sharp decline in 2029 and 2030.

Micron's earnings will take an even bigger hit in a cyclical downturn than revenue, as its additional supply capacity will increase operating expenses. In Micron's last cyclical downturn, revenue fell about 50% from its peak, but net income turned severely negative. That's the big reason Micron stock trades for just 6 times analysts' earnings expectations for next year. Its current earnings simply aren't sustainable.

Micron's stock price tends to move in the same direction as its net income but not to the same extent. Instead, its P/E ratio shrinks as net income climbs and expands as net income falls. Still, the change in net income is not fully muted. That's to say, there will likely be a sell-off when it becomes evident that earnings are about to or have already reached their peak.

It typically takes about two years for Micron earnings to reach a trough. If that pattern plays out again, Micron will hit the bottom of the next down cycle in 2030, based on current analyst expectations. The good news for investors is that the stock typically recovers quickly once it becomes evident that Micron has started another earnings cycle. The market pushes the stock higher on expectations of strong earnings growth, and it often recovers its previous high from the last earnings peak.

So why would anyone hold Micron stock through a down cycle? If they believe the down cycle will be shorter or less severe than usual, they can experience strong gains in the long run, despite the potential for near-term losses. But my base case is that Micron will be worth about as much in 2030 as it is at its peak in 2028.

It's worth noting that the stock price doesn't always recover so quickly. After the internet boom of the 1990s, Micron took over 20 years to recover to its all-time high.

So how much will Micron stock be worth in 2028? Its share price typically peaks between 7 and 15 times trailing earnings, but it peaks before earnings do. Analysts currently expect relatively flat earnings between 2027 and 2028, which should push the earnings multiple toward the low end. At 9 times 2027 earnings expectations, the stock price could peak around $1,600. Of course, there's a wide range of potential outcomes, and history doesn't always repeat itself.

Still, I wouldn't expect the stock to trade higher than that unless management gives analysts a reason to believe the earnings cycle will push net profits even higher and last longer than anticipated. As earnings peak, the stock typically falls to between 3 and 8 times trailing earnings, which would push the price down toward $1,000 at a 6-times-earnings multiple of analysts' 2028 expectations, which seems like a more reasonable price for the stock.

In other words, Micron may be able to deliver solid long-term gains through 2030 at the current price, but the path will likely entail a good amount of volatility and comes with a high degree of uncertainty. There may be much better opportunities to buy the stock in the future.

Micron Technology, Inc. is approaching its next earnings report, drawing investor focus to near-term performance. Key topics include earnings expectations, potential catalysts, and how MU's results may impact its valuation. The article centers on forward-looking drivers and possible risks tied to MU's upcoming financial disclosure.

Once upon a time, semiconductor stocks were solid dividend payers.

Before the AI boom, many of these household names paid yields that were significantly higher than the S&P 500, a reflection of the earlier perception of chip stocks as cyclical companies that rewarded investors with dividends as much as growth.

Nvidia's (NVDA +0.19%) yield topped 2% shortly after it launched its dividend in 2012, and Broadcom's was hovering above 3% for much of this decade. Intel was a dividend powerhouse with a yield of 3%-4% for much of the 2010s, before axing the payout to invest in its turnaround.

As chip stock prices have soared, yields have fallen, and most of these companies have ignored their dividend, choosing to invest in growth instead.

Nvidia's dividend yield had shrunk to as little as $0.01 a share, or a yield of 0.02%, but the company recently rewarded investors with a 2,400% dividend hike, raising its dividend to $0.25 per share, or a yield of 0.5%.

That may not sound like much but for longtime shareholders and other investors with large Nvidia holdings, that represents a huge windfall. With a market cap of $5.3 trillion, Nvidia is handing out roughly $25 billion in annual dividend payments.

Given the soaring profits in the semiconductor sector, Nvidia is unlikely to be the last chip stock to make that move. Another obvious candidate appears to be Micron (MU +2.28%), which is one of the three big memory chip stocks, along with Samsung and SK Hynix.

Image source: Getty Images.

Micron currently pays a quarterly dividend of $0.15, giving it a yield of just 0.06%.

Like Nvidia, Micron has seen profits skyrocket in the AI era, benefiting from the shortage in memory chips, and the stock is up more than 1,000% in the last two years.

The company initiated its dividend in 2021, shortly before a cyclical downturn in the memory sector that led to steep losses for the company. Today, however, Micron is far more profitable than it's ever been, with a net income of $50.5 billion over the last four quarters, and that's growing rapidly. That means Micron has a dividend payout ratio of just 1.1%, meaning it only returns one cent out of every dollar it earns in profits.

Micron could easily raise its dividend by 10x or 25x as Nvidia just did, and doing so could give the stock another leg up. Based on its price-to-earnings ratio, Micron stock is actually cheap, trading at a forward P/E of less than 7 based on fiscal 2027 expected earnings. That adds an incentive to hike the dividend as low valuations create opportunity for high yield.

Companies primarily spend profits on share buybacks, dividends, debt reduction, or some kind of business expansion like capital expenditures or acquisitions. Micron has big plans to expand, recently breaking ground on a $100 billion facility in upstate New York to be completed over the next 20-plus years, but the company can fund all of that with just a portion of next year's expected profits.

It's spent more than $9 billion to pay down debt this year, reducing its debt burden to just $5 billion, and it now has $25 billion in cash on its balance sheet.

The company has only spent modestly on share buybacks as well, despite the stock's ostensibly low valuation.

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Will Micron hike its dividend?Micron will eventually have to put the windfall from the memory bottleneck to use and share buybacks or dividend payments are the two most obvious choices.

Some combination of the two would make sense. Memory is notoriously cyclical and the company may be wary of overspending on returning capital to shareholders, but there's a way to do it prudently, as Nvidia has done. Doing so would take advantage of its valuation.

Micron could 10x both its dividend and share repurchases, and still have the vast majority of its cash flow available to invest in the business, or save for a rainy day.

Increasing the dividend and buybacks would reward investors and send a message that management still sees the stock as cheap, even after its parabolic rise. Such a move could give the stock a meaningful jolt, and that would be welcome news for investors as well.

Have you been searching for a stock that might be well-positioned to maintain its earnings-beat streak in its upcoming report? It is worth considering Micron (MU - Free Report) , which belongs to the Zacks Computer - Integrated Systems industry.

This chipmaker has an established record of topping earnings estimates, especially when looking at the previous two reports. The company boasts an average surprise for the past two quarters of 28.01%.

For the most recent quarter, Micron was expected to post earnings of $21.39 per share, but it reported $25.11 per share instead, representing a surprise of 17.39%. For the previous quarter, the consensus estimate was $8.8 per share, while it actually produced $12.2 per share, a surprise of 38.64%.

Price and EPS Surprise

For Micron, estimates have been trending higher, thanks in part to this earnings surprise history. And when you look at the stock's positive Zacks Earnings ESP (Expected Surprise Prediction), it's a great indicator of a future earnings beat, especially when combined with its solid Zacks Rank.

Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Micron currently has an Earnings ESP of +0.81%, which suggests that analysts have recently become bullish on the company's earnings prospects. This positive Earnings ESP when combined with the stock's Zacks Rank #2 (Buy) indicates that another beat is possibly around the corner. We expect the company's next earnings report to be released on September 30, 2026.

Investors should note, however, that a negative Earnings ESP reading is not indicative of an earnings miss, but a negative value does reduce the predictive power of this metric.

Many companies end up beating the consensus EPS estimate, though this is not the only reason why their shares gain. Additionally, some stocks may remain stable even if they end up missing the consensus estimate.

Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

Two factors often determine stock prices in the long run: earnings and interest rates. Investors can't control the latter, but they can focus on a company's earnings results every quarter.

Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive earnings surprises.

The ability to identify stocks that are likely to top quarterly earnings expectations can be profitable, but it's no simple task. Here at Zacks, our Earnings ESP filter helps make things easier.

The Zacks Earnings ESP, ExplainedThe Zacks Earnings ESP, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate.

With this in mind, the Expected Surprise Prediction compares the Most Accurate Estimate (being the most recent) against the overall Zacks Consensus Estimate. The percentage difference provides the ESP figure. The system also utilizes our core Zacks Rank to provide a stronger system for identifying stocks that might beat their next quarterly earnings estimate and possibly see the stock price climb.

When we join a positive earnings ESP with a Zacks Rank #3 (Hold) or stronger, stocks posted a positive bottom-line surprise 70% of the time. Plus, this system saw investors produce roughly 28% annual returns on average, according to our 10 year backtest.

Stocks with a ranking of #3 (Hold), or 60% of all stocks covered by the Zacks Rank, are expected to perform in-line with the broader market. Stocks with rankings of #2 (Buy) and #1 (Strong Buy), or the top 15% and top 5% of stocks, respectively, should outperform the market; Strong Buy stocks should outperform more than any other rank.

Should You Consider Micron?Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. Micron (MU - Free Report) earns a #2 (Buy) right now and its Most Accurate Estimate sits at $31.71 a share, just 12 days from its upcoming earnings release on September 30, 2026.

Micron's Earnings ESP sits at +0.81%, which, as explained above, is calculated by taking the percentage difference between the $31.71 Most Accurate Estimate and the Zacks Consensus Estimate of $31.45. MU is also part of a large group of stocks that boast a positive ESP. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

MU is one of just a large database of Computer and Technology stocks with positive ESPs. Another solid-looking stock is Alphabet (GOOGL - Free Report) .

Alphabet is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on November 4, 2026. GOOGL's Most Accurate Estimate sits at $3.03 a share 47 days from its next earnings release.

Alphabet's Earnings ESP figure currently stands at +3.41% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $2.93.

MU and GOOGL's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.

Find Stocks to Buy or Sell Before They're ReportedUse the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>

Micron has already posted five-year returns that most stocks never see in a lifetime, and Wall Street analysts are nearly unanimous that the run is not over. Here is what it would actually take to get the stock to $1,600…

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Few large-cap stocks have run harder in the past year than Micron Technology (NASDAQ: MU | MU Price Prediction). The Boise-based memory maker is the only U.S.-headquartered producer of DRAM and NAND at scale, and CEO Sanjay Mehrotra has spent the past four quarters telling investors that “AI has elevated the value of memory”.

The market is finally believing him. Shares are up 234.28% year-to-date and 501.33% over the past year, riding a supercycle in high-bandwidth memory (HBM) that Mehrotra says has “structurally transformed” the industry.

With the stock at $953.49, here is the path to $1,600 in 2027.

Wall Street Already Sees Big Upside From Here The analyst community is unusually aligned. The consensus 12-month price target sits at $1,513.11, with 44 of 48 covering analysts at buy or strong buy and zero sells. That target implies roughly 59% upside from today.

Estimates keep climbing: the fiscal 2027 EPS consensus has moved from $112.17 ninety days ago to $156.07 today, and Micron has beaten expectations in each of the last four quarters, with surprise margins of 5.94%, 21.33%, 39.74%, and 23.79%. When a company keeps outpacing rising estimates, actual results usually land higher than the model.

Path to $1,600 Per Share The math here is unusually friendly. Fiscal 2027 EPS estimates of $156.07 put Micron at just roughly 6x forward earnings, versus the S&P 500’s 22x. Getting to $1,600 would require only about 10x forward EPS, still a meaningful discount to the market. 

Catalysts that could close that gap: HBM4 ramp: Micron has already shipped over $1 billion in HBM4 revenue, with the 12-high volume ramp tracking twice as fast as HBM3E 12-high. Strategic Customer Agreements: The company has signed 16 multi-year take-or-pay contracts covering roughly 25% of revenue, with $22 billion in cash deposits and letters of credit backing them. RPO already sits near $100 billion. Structural supply tightness: Management expects tight conditions to persist beyond calendar 2027, with data-center DRAM and NAND bit shipments projected to more than double from two years ago. Guidance trajectory: Fiscal Q4 guidance calls for record revenue of $50 billion ± $1 billion and non-GAAP EPS of $31 ± $1, with gross margin near 86%. Capital returns: Beginning December 9, 2026, Micron plans to increase capital returns and eventually return 100% of excess cash to shareholders. Micron Has Done This Kind of Run Before Getting to $1,600 requires roughly 68% more upside. Ambitious, but Micron has posted 50%+ annual gains in 2016, 2017, 2023, 2024, and 2025, and the trailing five-year return already sits at 1,216.24%.

The stock’s beta of 2.22 confirms it moves in outsized swings in both directions, so another year of large gains during a demand cycle this strong is well within its historical range.

Bottom Line on $1,600 The bear case is real. Memory is cyclical, capex is running $7.8 billion per quarter, and lead-customer concentration in HBM4 matters. But at 6x forward earnings with take-or-pay contracts, structural supply tightness, and gross margins pushing 86%, a re-rating to 10x forward is hardly heroic.

If Mehrotra is right that memory has become “a strategic asset” in the AI stack, $1,600 in 2027 is a stretch worth taking seriously.

Setups like this, where a company shows up early with pricing power and multi-year contracts, are exactly the traits we cataloged in a free playbook on spotting the next Nvidia-style winner. Returns like this shouldn’t be expected every year, but we’ve outlined the blueprint for how Micron could see outsized returns in 2027.

Contact [email protected] for any questions or corrections.

Here at Zacks, we offer our members many different opportunities to take full advantage of the stock market, as well as how to invest in ways that lead to long-term success.

One of our most popular services, Zacks Premium offers daily updates of the Zacks Rank and Zacks Industry Rank; full access to the Zacks #1 Rank List; Equity Research reports; and Premium stock screens like the Earnings ESP filter. All are useful tools to find what stocks to buy, what to sell, and what are today's hottest industries.

It also includes the Focus List, a long-term portfolio of top stocks that have all the elements to beat the market.

Breaking Down the Zacks Focus ListIf you could get access to a curated list of stocks to kickstart your investment portfolio, wouldn't you jump at the chance to take a peek?

That's what the Zacks Focus List offers. It's a portfolio of 50 stocks that serve as a starting point for long-term investors to build their individual portfolios. The stocks included in the list are set to outperform the market over the next 12 months.

One thing that makes the Focus List even more advantageous is that each pick comes with a full Zacks Analyst Report. This helps explain why each stock was selected and why we believe it's a good pick for the long-term.

The portfolio's past performance only solidifies why investors should consider it as a starting point. For 2020, the Focus List gained 13.85% on an annualized basis compared to the S&P 500's return of 9.38%. Cumulatively, the portfolio has returned 2,519.23% while the S&P returned 854.95%. Returns are for the period of February 1, 1996 to March 31, 2021.

Focus List MethodologyWhen stocks are picked for the Focus List, it reflects our enduring reliance on the power of earnings estimate revisions.

Earnings estimates, or expectations of growth and profitability, come from brokerage analysts who track publicly traded companies; these analysts work together with company management to analyze every aspect that may affect future earnings, like interest rates, the economy, and sector and industry optimism.

Investors also need to look at what a company will earn down the road. This is why earnings estimate revisions are so important.

Stocks that receive upward earnings estimate revisions are more likely to receive even more upward changes in the future. For example, if an analyst raised their estimates last month, they're more likely to do it again this month, and other analysts are likely to do the same.

Utilizing the power of earnings estimate revisions is when the Zacks Rank joins the party. A unique, proprietary stock-rating model, the Zacks Rank uses changes to quarterly earnings expectations to help investors create a winning portfolio.

The Zacks Rank consists of four main pillars: Agreement, Magnitude, Upside, and Surprise. Each one is given a raw score, which is recalculated every night and compiled into the Rank. Then, stocks are classified into five groups, ranging from "Strong Buy" to "Strong Sell," using this data.

The Focus List is comprised of stocks hand-picked from a long list of #1 (Strong Buy) or #2 (Buy) ranked companies, meaning that each new addition boasts a bullish earnings consensus among analysts.

It can be very profitable to buy stocks with rising earnings estimates, as stock prices respond to revisions. By adding Focus List stocks, there's a great chance you'll be getting into companies whose future earnings estimates will be raised, which can lead to price momentum.

Focus List Spotlight: Micron (MU - Free Report) Micron Technology, headquartered in Idaho, has established itself as one of the leading worldwide providers of semiconductor memory solutions.

Since being added to the Focus List on December 27, 2016 at $23.26 per share, shares of MU have increased 4102.49% to $977.5. The stock is currently a #2 (Buy) on the Zacks Rank.

Two analysts revised their earnings estimate higher in the last 60 days for fiscal 2026, while the Zacks Consensus Estimate has increased $0.05 to $73.9. MU also boasts an average earnings surprise of 21.1%.

Additionally, MU's earnings are expected to grow 791.4% for the current fiscal year.

Reveal Winning StocksUnlock all of our powerful research, tools and analysis, including the Zacks #1 Rank List, Equity Research Reports, Zacks Earnings ESP Filter, Premium Screener and more, as part of Zacks Premium. You'll quickly identify which stocks to buy, hold and sell, and target today's hottest industries, to help improve the performance of your portfolio. Gain full access now >>

Steve Eisman thinks the real winners of the AI arms race are not the chip designers everyone is fighting over but the suppliers equipping both sides of the battle. Five stocks have already lapped Nvidia in 2026, and Eisman ranks…

Steve Eisman highlighted a subscriber email arguing the safest way to play the AI buildout is owning upstream suppliers rather than betting on any one chip designer. The key insight: “In this knife fight you want to be the one selling the knives.” The picks: ASML (NASDAQ:ASML | ASML Price Prediction), KLA (NASDAQ:KLAC), Lam Research (NASDAQ:LRCX), Applied Materials (NASDAQ:AMAT), Micron (NASDAQ:MU) and SK Hynix.

Micron is up 241.54% year to date; Applied Materials up 78.46% YTD; Lam Research up 75% YTD; ASML up 59.77% YTD; KLA up 49.35% YTD, all outpacing NVIDIA (NASDAQ:NVDA)’s 17.36% YTD gain. Eisman’s caveat: “The current AI ecosystem is dependent, almost completely dependent on the health of Anthropic and OpenAI,” and “if OpenAI fails within a year there will be a massive correction in the stock market.”

Here is our ranking of the five knife-sellers powering the AI capex cycle, judged on AI-driven revenue growth, backlog visibility, margin expansion, capacity plans and guidance direction.

5. KLA: Process Control’s Quiet Compounder KLA anchors the yield-management layer every advanced fab depends on. The stock is up 49.35% YTD, though down 13.08% in the past month. As leading-edge logic and DRAM ramp, inspection intensity rises with every node shrink, keeping KLA as the default process-control pick.

4. Lam Research: Etch and Deposition Beneficiary Lam sits directly in the DRAM and HBM buildout, where etch and deposition steps multiply with 3D memory scaling. Shares are up 75% YTD. The concern: a pullback has begun, and Lam’s memory concentration means an OpenAI-style shock to AI capex would hit here first.

3. Tokyo Electron: The Non-U.S. Diversifier Tokyo Electron (OTC: TOELY) rounds out the WFE oligopoly with meaningful share in coater/developer, etch and deposition. It offers exposure to the same AI capex tailwinds without the U.S. export-control overhang that periodically weighs on American peers.

2. Applied Materials: Record Quarter, Rising 2027 Visibility Applied Materials delivered fiscal Q3 2026 revenue of $9.12B, up 24.8% year over year, with non-GAAP EPS of $3.50 beating the $3.39 consensus. DRAM share of Semi Systems rose to 26% from 22%, and the company logged its 13th consecutive quarter of YoY gross margin expansion. Q4 guidance calls for revenue of roughly $10.25B and non-GAAP EPS of about $4.02. CEO Gary Dickerson said “we expect another strong record year in 2027” backed by plans to double quarterly system output by 2028. Shares trade at a forward P/E of 23 with an analyst target of $640.89 versus the current $427.91. AMAT is down 16.71% in the past month.

1. ASML: The Only EUV Game in Town ASML tops the list because the AI logic and DRAM roadmap cannot advance without its EUV systems. Q2 2026 revenue hit $10.65B, up 21.3% YoY, with operating margin expanding to 37.1% from 34.6%. Management raised full-year 2026 guidance to $49.11B-$51.40B revenue at 54-56% gross margins and plans to add 30% to low-NA EUV capacity for 2027. CFO Roger Dassen said “For 2027, we are now close to being fully covered with orders for low NA EUV,” and CEO Christophe Fouquet described DRAM conditions as “the perfect storm for ASML on DRAM this year and most probably the next few years to come.” Backlog reached $45.06B, and a $12B share buyback program runs 2026-2028. The stock trades at a forward P/E of 26 against a $2,135.91 analyst target versus the current $1,641.46. ASML is down 8.96% in the past month.

Closing the Loop on the Knife-Sellers The ranking reflects industry structure: ASML at the top on EUV monopoly and multi-year order coverage, Applied Materials second on record DRAM and HBM exposure, then Lam, Tokyo Electron and KLA. All five have outpaced NVIDIA in 2026. The one-month pullbacks in AMAT, KLA and Lam suggest the market is testing how much hyperscaler spending is truly durable. For readers who want to look beyond the fabs themselves, we profiled seven other AI-buildout suppliers, from power to cooling, in a free report you can grab here.

Contact [email protected] for any questions or corrections.

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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.

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.

Micron Technology, Inc. faces a pivotal FQ4 2026 earnings report amid record margin expansion and AI-driven demand. Consensus expects MU's net margin to reach a record of 70.7% in FQ4. I share the optimism for MU in the near term but remain skeptical about the sustainability in the longer term.

Micron (MU +5.50%) has experienced extreme price swings during the past 17 months. Since hitting a low in April 2025, the stock has risen 15-fold.

That increase includes the 22% pullback in the stock price since its high in June, placing the semiconductor stock in an interesting but uncertain position heading into its Sept. 30 earnings report date. From some perspectives, the stock remains appealing despite its dramatic rise, but its history suggests it may not be as attractive as some analysts may think.

Knowing that, should investors treat the stock as a buying opportunity ahead of the earnings announcement, or interpret the pullback as a warning and stay away from the memory giant?

Image source: The Motley Fool.

Micron's meteoric rise One particular product offering is the primary reason for the stock's rise -- high-bandwidth memory (HBM).

Nvidia investors may talk about how that company's artificial intelligence (AI) accelerators are critical to AI development. However, HBM is nearly as critical.

HBM is not the same type of memory that powers most tech products. Instead, it is a 3D-stacked DRAM (dynamic random-access memory) designed for the enormous data throughput needed for AI, data-intensive workloads, and high-performance computing.

Micron is only one of three companies manufacturing this memory, along with Samsung and SK Hynix. Not surprisingly, demand for AI infrastructure is such that Micron and its peers cannot produce it fast enough.

That shortage has sent memory prices soaring, dramatically improving the company's financials. Revenue in the first three quarters of fiscal 2026 (ended May 28) was $79 billion, up 203% from the same period last year. That led to net income for the same time frame of $47 billion, compared with $5.3 billion during the same year-ago period.

In the near term, growth is on track to accelerate. Demand is so strong that analysts forecast Micron will end the fiscal year with a 247% revenue increase, then slow to 88% in fiscal 2027.

Despite those gains, Micron stock trades at only 21 times trailing earnings. At least on the surface, that makes Micron appear undervalued, which may motivate investors to buy more.

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977.50

Why now could be a time for caution However, Micron probably owes its low price-to-earnings (P/E) ratio to the nature of its business and the stock's history.

Memory is among the more cyclical parts of the semiconductor industry. High demand tends to drive memory prices higher, boosting profit. This is the company's current situation, and given the industry's behavior during the past 10 years, many analysts believe we are in a supercycle driving a longer-term bull market in chip stocks.

The problem comes when the cycle turns negative. Since memory is a commoditized product, shortages can give way to surpluses when demand slows, as it inevitably does. When supply exceeds demand, it usually causes memory prices to swoon and, typically, Micron's profits and stock price to crater.

That means at the current stock price, the P/E ratio could spike into the triple digits if net income were merely to fall back to fiscal 2025 levels. Under such conditions in the past, Micron stock has lost more than 50% of its value several times in its history and has experienced two declines exceeding 80%.

Admittedly, the memory boom may look like it will last forever right now, and the earnings announcement may well confirm the memory shortage isn't over. Still, semiconductor stocks have never escaped memory cycles in the past, and this time is likely no different. Thus, investors should probably be aware of this issue before buying Micron stock.

Investing in Micron stock Given Micron's positioning, investors should approach its stock with caution heading into earnings.

Indeed, the industry is likely in a supercycle, and the boom does not appear to be over yet. Thus, investors could easily benefit by taking a position before the Sept. 30 announcement. Nonetheless, given the recent price moves, negative news is more likely to trigger sell-offs than in recent quarters.

That reality may make Micron a trade. If a down cycle begins sooner than expected, the drop could far exceed 22%. Given the risk of being stuck in a losing position for some time, it may not be a good time for buy-and-hold investors to add shares.