Micron (MU -4.79%) stock tumbled in Thursday trading, closing the day down 4.8% -- but the news wasn't as bad as you might think.
Bond yields declined Thursday, suggesting the cost Micron customers bear when financing their purchases of memory chips won't climb forever. Furthermore, minutes released from the last meeting of the Federal Reserve Open Markets Committee indicate the Fed may not keep raising interest rates to combat inflation -- also good news for debtors.
Unfortunately for Micron investors, that wasn't all the news that came out Thursday. As CNBC reports, OpenAI just confirmed that its annual recurring revenue as of the end of September was only $50 billion -- not the $68 billion previously posited.
Image source: Micron.
What that means for Micron stockIf OpenAI's not making as much money as it thought it was, then Micron's customers might actually need to take on more loans to buy the company's memory chips. Because if they're anything like OpenAI, their revenues may not be generating enough cash to pay for those chips out of cash flow alone!
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What's next for Micron stockSo is it time for Micron shareholders to panic? Not necessarily.
Although OpenAI fell short of the mark in September, the company still grew its revenue run rate 77% in the September quarter. And a new report out of Lynx Equity Strategies today confirms that the AI revolution is alive and well.
Tight supply of memory chips has driven up the prices Micron can charge for its wares, and according to Lynx analyst KC Rajkumar, memory supply in 2027 and 2028 will be "significantly tighter than in fiscal 2026."
Tight supply is just what Micron needs to keep its profits growing. Trading at 7x next year's earnings, Micron stock still looks like a buy to me.
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.
Samsung Electronics (SSNLF +0.00%) is still setting profit records. Its preliminary results, released early Thursday in Seoul, put third-quarter operating profit at around 107.4 trillion won, or about $80 billion.
That's up 20% from the second quarter, when Samsung set its previous record of 89.5 trillion won. And it's almost nine times the 12.2 trillion won the company made a year ago. Samsung had never earned over 100 trillion won in one quarter before.
Ahead of the report, I argued that the number to worry about for Micron Technology (MU -4.79%) was a profit figure back around the second quarter's level. Samsung didn't get close to that.
Micron shares gained around 4% on Wednesday to $1,088, before Samsung's results came out. This puts the memory stock about 13% under its 52-week high of $1,255 as of this writing.
Samsung's number suggests memory prices kept climbing through September, but more slowly than earlier this year.
Image source: Micron.
A fourth straight recordThe Korean tech company's preliminary report shows just consolidated sales and operating profit. The division breakdown comes with full results on Oct. 29.
But the chip unit likely makes up almost all of it. Korean industry insiders estimate that Samsung's chip division made about as much operating profit as the whole company did, or a bit more, as its phone and device businesses struggled with surging parts costs.
Showing how quickly this boom built, Samsung's operating profit has now set a record four quarters in a row: 20.1 trillion won in the fourth quarter of 2025, 57.2 trillion won in the first quarter of 2026, 89.5 trillion won in the second quarter, and 107.4 trillion won now. But the sequential gains have dropped every time. Profit almost tripled from the fourth quarter to the first, then climbed by 56% in the April-to-June period and by 20% from July through September. Put simply, Samsung is still growing fast, just not at the rate it was earlier this year.
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What does it say about memory prices?This slowdown looks a lot like what Micron posted last week. In its fiscal 2026 fourth quarter, which ended Sept. 3, Micron's DRAM revenue rose to a record $39.8 billion, over four times the year-ago number and 27% above fiscal Q3. DRAM was around 73% of all sales.
But most of that sequential gain came from price, and the price hikes are slowing. Micron said DRAM prices rose in the high-teens percentage range from the previous quarter, after climbing in the low-60s percentage range in fiscal Q3.
Micron sees more of the same. Management forecast record fiscal first-quarter revenue of around $61.5 billion, up about 13% over fiscal Q4, and said it expects price hikes to slow as fiscal 2027 goes on.
Samsung also expected supply to stay tight when it posted its second-quarter results in July, pointing to spending on artificial intelligence (AI) infrastructure.
"Despite efforts to increase production, supply constraints are expected to continue," it said in its July 30 release.
Of course, Samsung's July-to-September quarter mostly overlaps the period Micron has already reported, not the fiscal first quarter it's guiding for now, which started Sept. 4. So Samsung's record mainly confirms that memory prices held up through the summer. It might not say much about Micron's current quarter.
Micron stock still trades like the boom will endMicron's management seems even more upbeat than Samsung. "As strong as fiscal 2026 was, we expect fiscal 2027 to be even better," CEO Sanjay Mehrotra said in his prepared remarks for the Sept. 30 earnings call. He added that Micron expects memory and storage markets to be far tighter in fiscal 2027 and 2028 than in 2026.
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The stock's price doesn't show much of that confidence. At $1,088, the stock trades at around 6 times earnings, using analysts' per-share estimates for fiscal 2027, which is already underway. Even against fiscal 2026's earnings of $74.33 per share, which were well under what Micron is making now, the stock trades at around 15 times earnings. And at those levels, investors arguably expect these profits could drop sharply at some point, when the industry adds enough new supply.
Does Samsung's record change the case for Micron stock? Not much, in my view. It makes Micron's $61.5 billion guidance look safer, and it fits what management has said about tight supply. But investors have given the stock a low valuation because of doubts over how long these conditions last, and Samsung's preliminary report says nothing about 2028.
Still, at this price, I think Micron stock is worth a look for investors who share management's view of 2027 and 2028.
Tech StocksOpenAI’s annualized revenue reportedly fell short of expectations — but analysts say that reflects differences in how the figure is reported, not weakness in AI demand
Shares of Micron Technology, Nvidia and other artificial-intelligence-related chip makers fell hard on Thursday, as investors digested a bearish report on one of the AI industry’s most important players.
OpenAI reportedly told investors that its annualized revenue was reaching $50 billion toward the end of September — $20 billion short of the $70 billion it had previously projected, according to the Financial Times. The metric is calculated by taking revenue from a short period, such as a month or a quarter, and multiplying it to gauge what a company could earn over a full year.
Key Takeaways Micron Technology has a 63.8% net profit margin and 133.9% expected earnings growth this year. NVIDIA posted a 63.7% net profit margin, with expected earnings growth of 93.9% this year. Par Pacific Holdings has a 9.9% net profit margin and 214% expected earnings growth this year. October may be historically a volatile month for the stock market, but investors shouldn’t shy away from investing. Instead, they should look for companies that deliver strong returns after covering all operating and non-operating expenses. As a result, investors generally prefer profitable businesses over companies that consistently incur losses. To evaluate a company’s profitability, investors commonly use profitability ratios to measure its ability to generate consistent, sustainable earnings.
On that note, Micron Technology, Inc. (MU - Free Report) , NVIDIA Corporation (NVDA - Free Report) and Par Pacific Holdings, Inc. (PARR - Free Report) stand out as the most profitable stocks, supported by strong net income ratios and upside potential.
Why the Net Income Ratio Is Important to Investors The net income ratio is a key indicator of a company’s overall profitability. It shows the percentage of net income relative to total sales revenues. The net income ratio helps assess a firm’s ability to cover operating and non-operating expenses with revenues. A higher net income ratio usually indicates a company’s ability to generate sufficient revenue and manage all business functions effectively.
Stock Screening Criteria Applied in the Research Wizard The net income ratio is not the only indicator of future winners. So, we have added a few more criteria to arrive at a winning strategy.
Zacks Rank equal to #1: Whether the market is good or bad, stocks with a Zacks Rank #1 (Strong Buy) have a proven history of outperformance. You can see the complete list of today’s Zacks #1 Rank stocks here.
Trailing 12-Month Sales and Net Income Growth Higher than X Industry: Stocks that have witnessed higher-than-industry sales and net income growth in the past 12 months are positioned to perform well.
Trailing 12-Month Net Income Ratio Higher than X Industry: A high net income ratio indicates a company’s solid profitability.
Percentage Rating Strong Buy greater than 70: This indicates that 70% of the current broker recommendations for the stock are Strong Buy.
These few parameters have narrowed the universe of more than 7,685 stocks to only 14.
Here are three of the 14 stocks that qualified for the screening:
Micron Technology Micron Technology is a global provider of memory and storage products. MU's 12-month net profit margin is 63.8%. Micron's expected earnings growth rate for the current year is 133.9%.
NVIDIA NVIDIA is a leading AI infrastructure company operating across global markets. NVDA’s 12-month net profit margin is 63.7%. Its expected earnings growth rate for the current year is 93.9%.
Par Pacific Holdings Par Pacific Holdings, an energy company, supplies both renewable and conventional fuels across the United States. PARR’s 12-month net profit margin is 9.9%. Its expected earnings growth rate for the current year is 214%.
HWG Holdings LP purchased a new position in Micron Technology, Inc. (NASDAQ:MU – Free Report) in the third quarter, according to its most recent Form 13F filing with the Securities & Exchange Commission. The fund purchased 4,492 shares of the semiconductor manufacturer’s stock, valued at approximately $4,784,000. Micron Technology comprises about 1.1% of HWG Holdings LP’s portfolio, making the stock its 23rd biggest holding.
Other hedge funds and other institutional investors have also recently bought and sold shares of the company. Denali Advisors LLC acquired a new stake in shares of Micron Technology during the 2nd quarter worth approximately $7,364,000. Castleark Management LLC bought a new position in shares of Micron Technology in the first quarter valued at approximately $3,709,000. Legacy Wealth Management LLC MS raised its stake in shares of Micron Technology by 73.3% in the 2nd quarter. Legacy Wealth Management LLC MS now owns 3,544 shares of the semiconductor manufacturer’s stock worth $4,091,000 after buying an additional 1,499 shares in the last quarter. Oppenheimer & Co. Inc. lifted its holdings in Micron Technology by 16.0% in the 2nd quarter. Oppenheimer & Co. Inc. now owns 48,520 shares of the semiconductor manufacturer’s stock valued at $56,006,000 after acquiring an additional 6,702 shares during the last quarter. Finally, Franklin Street Advisors Inc. NC boosted its holdings in Micron Technology by 2,461.4% during the second quarter. Franklin Street Advisors Inc. NC now owns 37,141 shares of the semiconductor manufacturer’s stock worth $42,871,000 after buying an additional 35,691 shares in the last quarter. 80.84% of the stock is owned by hedge funds and other institutional investors.
Key Headlines Impacting Micron Technology Here are the key news stories impacting Micron Technology this week:
Positive Sentiment: Zacks upgraded Micron to “Strong Buy.” The rating change reinforces the bullish view following Micron’s recent earnings beat and stronger-than-expected outlook. Micron Technology Stock Rating Upgraded by Zacks Research Positive Sentiment: DA Davidson raised its price target to $3,000 from $2,100 while maintaining a Buy rating. Analyst Gil Luria expects AI infrastructure spending to keep memory demand ahead of supply potentially through 2028, implying substantial long-term upside. Why Is Micron Stock Rising? Positive Sentiment: Micron’s record results continue to support the AI memory-supercycle thesis. Fiscal fourth-quarter revenue reached $54.23 billion and adjusted EPS was $33.42, while first-quarter fiscal 2027 guidance calls for $37.15–$39.15 of EPS. More than 75% of expected fiscal 2027 shipments are reportedly committed, improving visibility and reducing reliance on spot memory prices. Micron’s Latest Earnings Reveal Why the AI Memory Supercycle Could Run for Years Positive Sentiment: Reports highlighting Samsung’s record profit and Micron’s long-term customer agreements suggest memory suppliers may enjoy stronger pricing power and less severe boom-bust cycles. Data-center SSDs, high-bandwidth memory and AI-agent workloads are expanding Micron’s growth opportunities. Why Micron Investors Should Pay Attention to Samsung’s Record Profit Neutral Sentiment: Micron agreed to pay Netlist $600 million for a five-year patent license and settlement, resolving litigation but creating a sizable cash expense. Micron Technology and Netlist Settle Patent Dispute Negative Sentiment: A Taiwan union representing Micron workers authorized a strike over bonus negotiations. No walkout was announced, but disruption at a major manufacturing hub could threaten production and raise costs. Micron’s Taoyuan Union Secures Authorization to Strike Negative Sentiment: Some analysts warn that slowing memory-price growth, potentially lower margins and Micron’s enormous prior rally leave the stock vulnerable if supply catches up with AI-driven demand. Investor Michael Burry’s reported longer-dated put positions add to the caution. Micron NAND Is Not One Market Anymore Insider Activity at Micron Technology In other news, CEO Sanjay Mehrotra sold 40,000 shares of the business’s stock in a transaction dated Friday, August 21st. The shares were sold at an average price of $968.90, for a total transaction of $38,756,000.00. Following the transaction, the chief executive officer directly owned 264,503 shares in the company, valued at $256,276,956.70. The trade was a 13.14% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, EVP Sumit Sadana sold 15,000 shares of the stock in a transaction on Tuesday, August 18th. The shares were sold at an average price of $934.29, for a total value of $14,014,350.00. Following the completion of the sale, the executive vice president owned 191,021 shares in the company, valued at approximately $178,469,010.09. This trade represents a 7.28% decrease in their position. The disclosure for this sale is available in the SEC filing. Over the last three months, insiders sold 95,879 shares of company stock valued at $90,939,466. 0.24% of the stock is owned by corporate insiders. Wall Street Analysts Forecast Growth A number of analysts have commented on the stock. DA Davidson upped their price objective on shares of Micron Technology from $2,100.00 to $3,000.00 and gave the company a “buy” rating in a research note on Wednesday. Daiwa Securities Group lifted their price target on Micron Technology from $1,600.00 to $1,700.00 and gave the company a “buy” rating in a report on Friday, July 17th. Wedbush reissued an “outperform” rating and set a $1,400.00 target price on shares of Micron Technology in a research report on Monday, September 28th. JPMorgan Chase & Co. boosted their price objective on shares of Micron Technology from $550.00 to $1,540.00 and gave the stock an “overweight” rating in a research note on Thursday, June 25th. Finally, BMO Capital Markets reaffirmed an “outperform” rating on shares of Micron Technology in a report on Thursday, October 1st. One research analyst has rated the stock with a Strong Buy rating, forty-one have issued a Buy rating and four have given a Hold rating to the stock. According to data from MarketBeat, the company currently has a consensus rating of “Moderate Buy” and a consensus price target of $1,407.88.
Get Our Latest Stock Analysis on MU
Micron Technology Stock Up 4.1% Shares of NASDAQ MU opened at $1,088.00 on Thursday. The firm’s 50-day moving average is $972.71 and its 200-day moving average is $836.22. The company has a current ratio of 3.31, a quick ratio of 2.94 and a debt-to-equity ratio of 0.03. Micron Technology, Inc. has a 1 year low of $179.61 and a 1 year high of $1,255.00. The firm has a market capitalization of $1.23 trillion, a PE ratio of 14.66, a price-to-earnings-growth ratio of 0.18 and a beta of 2.22.
Micron Technology (NASDAQ:MU – Get Free Report) last posted its earnings results on Wednesday, September 30th. The semiconductor manufacturer reported $33.42 earnings per share (EPS) for the quarter, topping the consensus estimate of $31.77 by $1.65. The company had revenue of $54.23 billion during the quarter, compared to analyst estimates of $51.33 billion. Micron Technology had a return on equity of 92.62% and a net margin of 63.80%.The company’s revenue for the quarter was up 379.1% compared to the same quarter last year. During the same period in the previous year, the company earned $3.03 EPS. Micron Technology has set its Q1 2027 guidance at 37.150-39.150 EPS. Equities analysts expect that Micron Technology, Inc. will post 175.82 EPS for the current year.
Micron Technology Announces Dividend The business also recently declared a quarterly dividend, which will be paid on Thursday, October 29th. Investors of record on Wednesday, October 14th will be given a dividend of $0.15 per share. The ex-dividend date of this dividend is Wednesday, October 14th. This represents a $0.60 annualized dividend and a yield of 0.1%. Micron Technology’s dividend payout ratio is 0.81%.
Micron Technology Profile (Free Report)
Micron Technology, Inc is a semiconductor company that develops and manufactures memory and storage solutions. Its product portfolio includes dynamic random-access memory (DRAM), NAND flash memory, three-dimensional XPoint-related technologies, solid-state drives, and high-bandwidth memory products designed for demanding computing applications.
The company serves customers across the data center, artificial intelligence, networking, automotive, industrial, mobile, consumer electronics, and embedded markets.
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After the market closed on Sept. 30, Micron (MU -4.68%) published results for the fourth quarter of its last fiscal year, which ended on Sept. 3. Results for the period crushed expectations, with non-GAAP (adjusted) earnings per share of $33.42 on sales of $54.23 billion topping the average analyst estimate's call for per-share earnings of $31.61 on revenue of $51.07 billion.
Performance expectations were already high heading into the report, but the memory chip leader posted quarterly results and forward guidance that still blew past expectations. For the current quarter, the company's midpoint targets call for revenue of $61.5 billion and adjusted earnings per share of $38.15 -- topping the average analyst estimates for revenue of $57.02 billion and adjusted earnings of $35.40 per share. The strong results have already spurred significant gains for Micron's share price, and there are good reasons to think that the stock could end the year significantly higher.
Image source: Micron.
Micron stock has powerful tailwinds at its back With Micron crushing fiscal Q4 estimates, issuing far-better-than-expected Q1 targets, and guiding for sequential quarterly sales growth in each quarter this year on top of a sales estimate for the current quarter that far surpassed Wall Street's expectations, the company's latest business update has provided foundations that could allow the stock to continue rallying. There's another major catalyst on the horizon that could spur substantial gains for the high bandwidth memory (HBM) chip leader's share price.
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On Dec. 9, a restriction preventing Micron from buying back its stock will expire. The company had been barred from share repurchases as a condition of receiving funding under the CHIPS Act, but the two-year restriction period is now on the verge of lapsing. With this change on the horizon, there's a good chance that the tech specialist is about to return a massive amount of cash to shareholders.
In its previous earnings report, Micron said that it eventually planned to return 100% of its excess cash to shareholders. In other words, the company plans to use cash left over after operational spending and investments to drive future growth in order to carry out some combination of share buybacks and dividend payouts. It's also possible that the company could use some of its roughly $68.3 billion cash position net of debt to fund stock repurchases and dividends.
Micron has specifically pointed to the expiration of the CHIPS Act buyback restriction as an event that will allow it to increase its capital returns to shareholders. With the business posting great results and the potential for a surge in stock buybacks and big dividend increases on the horizon, the stock seemingly has a positive setup through the remainder of the year.
Keith Noonan has positions in Micron Technology. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool has a disclosure policy.
Micron (MU - Free Report) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company.
The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this chipmaker, should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- is principally built on this insight.
The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.
Consensus earnings estimates for the next quarter and full year have moved considerably higher for Micron, as there has been strong agreement among the covering analysts in raising estimates.
The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:
12 Month EPS
Current-Quarter Estimate RevisionsFor the current quarter, the company is expected to earn $38.20 per share, which is a change of +699.2% from the year-ago reported number.
The Zacks Consensus Estimate for Micron has increased 9.82% over the last 30 days, as eight estimates have gone higher compared to no negative revisions.
Current-Year Estimate RevisionsFor the full year, the company is expected to earn $176.61 per share, representing a year-over-year change of +133.9%.
There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, 13 estimates have moved up for Micron versus no negative revisions. This has pushed the consensus estimate 11.27% higher.
Favorable Zacks RankThe promising estimate revisions have helped Micron earn a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.
Bottom LineWhile strong estimate revisions for Micron have attracted decent investments and pushed the stock 5.9% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away.
SummaryMicron is separating cleanroom construction from equipment deployment, creating flexibility to expand capacity gradually as contracted demand becomes clearer.More than 75% of FY2027 output is already committed, giving MU substantially better information for long-term capacity allocation decisions.At roughly $1,064, MU trades near 6x FY2027 EPS, while consensus already assumes a severe future earnings normalization.My $1,500 fair value implies roughly 41% upside, based on $175 normalized EPS, an 8.2x multiple, and around $70 billion net cash. Zinkevych/iStock via Getty Images
Introduction I have been bullish on Micron Technology, Inc. (MU) due to AI making memory strategic within the computing stack. Post-fiscal Q4, however, I believe the more interesting thesis has shifted beyond HBM
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Analyst’s Disclosure: I/we have a beneficial long position in the shares of MU either through stock ownership, options, or other derivatives. 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.
Key Takeaways Micron's DRAM revenues hit $39.8B in Q4'26, up 343% y/y and 27% sequentially.AI workloads and larger models are driving DRAM demand, with server unit growth expected in the high teens.Micron expects DRAM bit shipments to grow in the low-20% range in 2027 and 2028 amid tight industry supply. Micron Technology, Inc.’s (MU - Free Report) DRAM business is emerging as one of the biggest beneficiaries of the AI infrastructure boom. The company’s DRAM revenues reached a record $39.8 billion in the fourth quarter of fiscal 2026, accounting for 73% of the total revenues. Sales skyrocketed 343% year over year and grew 27% sequentially, driven by strong pricing and rising demand.
AI workloads are driving higher memory requirements as models become larger and more complex. Growing model sizes, longer context windows and higher usage are increasing the amount of DRAM and storage needed to run AI efficiently. Micron expects server unit growth in the high-teens percentage range in both 2026 and 2027, providing a favorable demand backdrop for its DRAM products.
High-bandwidth memory (HBM) is another important growth opportunity. Micron’s HBM revenues grew faster than total company revenues in the fiscal fourth quarter as shipments expanded across more customers. It has also completed agreements covering most of its 2027 HBM bit supply, with significantly higher prices compared with the prior year.
The broader DRAM market also appears supportive. Micron expects industry DRAM bit shipments to grow in the low-20% range in 2027 and 2028, while the market remains supply constrained. The company sees no clear timeline for supply and demand to return to balance.
Given strong AI-driven demand, tight supply and improving pricing, Micron’s DRAM business appears well-positioned for growth. The Zacks Consensus Estimate for Micron’s fiscal 2027 DRAM revenues is pegged at $204.04 billion, indicating a 102.7% surge from the $100.68 billion reported in fiscal 2026.
Zscaler’s Rivals Also Benefit From AI Memory DemandZscaler’s major competitors, SK hynix (SKHY - Free Report) and Sandisk Corporation (SNDK - Free Report) , are also benefiting from AI-led demand for memory and storage solutions.
SK hynix is one of Micron’s closest DRAM rivals and has a strong position in HBM, which is critical for AI accelerators. In the second quarter of 2026, SK hynix generated 79.3 trillion Korean won in revenues, up 257% year over year, while operating profit surged 557% to 60.5 trillion won. HBM, AI-server DRAM and enterprise SSDs drove the strong results.
Sandisk is more focused on NAND and storage than DRAM, but it is another stock that stands to benefit from AI infrastructure spending. Its fiscal 2026 revenues jumped 175% to $20.25 billion, while data-center revenues soared 437% to $5.15 billion. Sandisk’s fourth-quarter fiscal 2026 revenues also surged 372% sequentially to $8.97 billion, showing strong demand for storage products used in data centers.
Both companies highlight the broadening AI-driven demand for memory and storage, although Micron remains particularly well-positioned in DRAM and HBM.
Micron’s Price Performance, Valuation & EstimatesShares of Micron have surged 281.2% year to date compared with the Zacks Computer and Technology sector’s return of 25.8%.
From a valuation standpoint, MU trades at a forward price-to-earnings ratio of 6.43, significantly lower than the sector’s average of 21.39.
Micron Technology 12-Month Forward P/E Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Micron’s fiscal 2027 and 2028 earnings implies year-over-year increases of 133.9% and 20.6%, respectively. Bottom-line estimates for fiscal 2027 and 2028 have been revised upward over the past seven days.
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.
Prefer to listen? Hear this as a ~5-minute audio briefing on The GuruFocus Brief.Stock NewsDow futures fall sharply: U.S. stock futures dropped over 500 points
Micron Stock Keeps Soaring. Here's Why Investors Should Watch the Buybacks Instead Summary
Micron stock is soaring on AI-driven memory demand, but management appears more focused on buybacks than splitting the shares
Micron Technology MU is leaning toward returning excess cash through share repurchases rather than using a stock split as its four-digit share price draws attention.
The memory-chip maker ended fiscal 2026 with $133.19 billion in revenue and $84.97 billion in GAAP net income. Operating cash flow reached $89.68 billion, versus $17.53 billion a year earlier.
Micron said its current buyback authorization stands at $2.2 billion and that it expects to increase capital returns beginning Dec. 9. Chief Financial Officer Mark Murphy said the company plans to seek additional authorization in the near term.
The cash buildup reflects demand for memory used in artificial intelligence systems. Micron has signed 26 strategic customer agreements, which it estimates will represent more than 35% of revenue through 2030. The company expects fiscal 2027 free cash flow to remain strong while funding higher manufacturing and R&D spending.
A stock split could lower the price of each share without changing the company’s overall value. For now, management’s stated priority is reducing the share count through repurchases. Shares climbed 4.06% to $1,088 in Wednesday trading.
Disclosures I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of META either through stock ownership, options, or other derivatives. 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.
Disclaimer: I am not an investment advisor or professional. This article is my own personal opinion and is not meant to be a recommendation of the purchase or sale of stock. The investments and strategies discussed within this article are solely my personal opinions and commentary on the subject. This article has been written for research and educational purposes only. Anything written in this article does not take into account the reader’s particular investment objectives, financial situation, needs, or personal circumstances and is not intended to be specific to you. Investors should conduct their own research before investing to see if the companies discussed in this article fit into their portfolio parameters. Just because something may be an enticing investment for me or someone else, it may not be the correct investment for you.
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.
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.
A union at Micron's largest DRAM production site just voted overwhelmingly to authorize a strike, and the result of one upcoming mediation session could determine whether that threat turns into something far more costly.
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Micron (NASDAQ:MU | MU Price Prediction) just reported the largest profits in its history. On Oct 7, 2026, the union at its Taoyuan, Taiwan operation said members voted 1,994 to 14 to authorize a strike over how those profits are split. Taiwan produced a majority of Micron’s DRAM output in 2025.
Yes votes were 99% of ballots cast, or 88.3% of the union’s 2,258 eligible members. The vote only authorizes a strike. No strike has been called, and no date or deadline has been set.
Shares fell about 2.8% before the open on the news. They then turned after an analyst set a Street-high price target and closed up 4.06% at $1,088.00.
What the Union Is Actually Asking For The union wants 15% of operating profit paid out through what it calls “an open and transparent profit-sharing system,” replacing Micron’s current incentive plan.
Union chair Jerry Lin spoke. He said, “We haven’t decided on an actual strike schedule yet.” The union is waiting for a Micron board meeting before deciding what to do next.
Members are being urged to take Monday, Oct. 19, 2026, off for a rally on Taipei’s Ketagalan Boulevard. The union itself says the rally is “not a strike.” Micron has said it takes the concerns seriously and is committed to good-faith engagement and mediation.
Micron employs about 15,000 people in Taiwan, and the Taoyuan and Taichung unions together represent more than 80% of them.
The larger Taichung union, with about 11,000 members, has not voted. It goes back to mediation with Micron on Oct. 22, 2026.
Taichung has enough members to slow output, making whatever it decides after mediation the bigger risk for Micron.
Record Profits Hand the Union Its Argument Fiscal fourth-quarter revenue reached $54.23 billion, up from $11.32 billion a year earlier. GAAP net income came in at $37.70 billion on a gross margin of 86.8%.
Fiscal 2026 net income was $84.97 billion, compared with $8.54 billion the year before. Chief executive Sanjay Mehrotra said, “Micron delivered record fiscal 2026 results, and we expect an even stronger fiscal 2027.”
At that margin, production costs take up only a small share of each sales dollar, making a bigger payout cheap for Micron and hard to refuse publicly.
Micron did announce a cash bonus for Taiwan staff in September worth about US$31,600, plus equity. The union wants payouts like that set by a formula instead of left to management.
Samsung Already Set the Price of a Settlement Samsung’s union called off a planned strike in May 2026 after a deal that set a bonus pool at 10.5% of chip-division operating profit.
That figure is below what Taoyuan is asking for and gives Micron a regional benchmark, and a deal in that range is much more likely than a stoppage.
Even a strike would hit a market that is short on supply. Management said it does “not have line of sight to when supply and demand will return to balance,”. When memory is tight, lost output pushes prices up for every seller, including Micron.
Micron is earning record profits. Management expects “greater tightness in the industry in 27 and in 28 versus 26,” and this dispute looks far more likely to end in a bonus pool than a closing.
The bear case is real. The stock is up 281.44% year to date, much of its DRAM output depends on one jurisdiction, and the larger union has not voted yet.
The test is Oct 22, 2026. If Taichung leaves mediation and schedules its own strike vote, the case for holding the stock drops, but if Micron’s board offers a profit-sharing formula before then, expect the dispute to blow over.
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The final Micron (NASDAQ: MU) dividend of 2026 is coming later this month, when the technology company is once again going to reward its shareholders with some passive income.
Specifically, fourth-quarter Micron stock dividend has been declared to be paid on October 29, 2026, with the ex-dividend date as of October 14.
As in the previous quarter, Micron shareholders will receive $0.15 for each share they hold, meaning 100 MU shares are going to net a total of $15 in the final quarter of 2026.
With Micron stock trading around $1,088, a 100-share position would currently be worth approximately $108,800. That means the upcoming $15 dividend represents a quarterly cash yield of roughly 0.014% on a 100-share position at that price.
Micron’s next dividend. Source: Dividend.com
Looking at the figure, it is obvious that Micron’s dividend remains relatively small compared with the stock’s market value. However, the company has nevertheless raised its quarterly payout to $0.15 in 2026 from $0.115 in 2025, giving investors hope the number could go up even more next year.
Micron dividend 2026 As of October 9, the company offers a dividend yield of 0.06%, significantly below the 1.37% average yield for technology stocks. However, this highlights the fact that Micron is primarily viewed as a growth stock rather than a traditional income investment.
Indeed, its forward payout ratio stands at just 0.35%, indicating that only a very small portion of the company’s earnings is currently being returned to shareholders through dividends.
Likewise, the next dividend follows reports of a record fiscal 2026. Notably, the company reported $133.19 billion in full-year revenue and $84.97 billion in GAAP net income, while fourth-quarter revenue reached record levels amid strong demand for memory used in artificial intelligence (AI) and data-center applications.
As MU shares have also surged sharply over the past year, the recent financial results also prompted a wave of bullish Micron stock price revisions, which argued the market has not yet fully grasped the chipmaker’s long-term potential.
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The semiconductor industry has been one of the most lucrative sectors to invest in over the past decade, with three stocks posting gains of over 6,000%. Nvidia (NVDA -0.74%) leads the pack with a more than 14,000% return during that stretch, followed by Advanced Micro Devices (AMD -0.55%) with a gain of over 9,000% and Micron Technology (MU +4.06%) at more than 6,000%.
So, which of these chip stocks still looks like a buy for the next decade? Let's take a closer look at why Nvidia and AMD remain buys, and why I'd pass on Micron.
Image source: Getty Images.
1. Nvidia Nvidia's decade of dominance stems from its graphics processing units (GPUs) becoming the primary chips for AI workloads, particularly for training AI models. The company created a wide moat in AI model training by seeding its CUDA software platform in places doing early AI research, leading to most foundational AI code being written on its software and optimized for its chips. That moat remains today.
However, the next decade will be about Nvidia's transition from a GPU maker to a full-fledged AI infrastructure company. Networking has been one of Nvidia's fastest-growing businesses, and it has developed its own central processing units (CPUs), which are becoming more important with agentic AI.
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Meanwhile, Nvidia's acquisition of "Groq" and its language processing units (LPUs) earlier this year set it up well for inference. This all allows it to offer complete end-to-end server solutions for specific AI tasks. It has also made important software-layer acquisitions with SchedMD and Hugging Face.
A huge winner over the past decade, Nvidia is well-positioned for the next 10 years, making the stock a buy.
2. Advanced Micro Devices Despite ceding the AI training market to Nvidia's GPUs, AMD's performance over the past decade has nonetheless been impressive. Many of these gains have come recently, as the chipmaker has positioned itself well in three key markets: inference, agentic AI, and physical AI.
Inference is more memory-bound than compute-constrained, and AMD has made important strides in capturing enterprise workloads constrained by memory availability and costs. Its chiplet designs allow its GPUs to be packaged with more high bandwidth memory (HBM), and it has recently acquired memory optimization company MEXT and inference chipmaker Taalas, which hardwire AI models into its chips. AMD has broken into the inference market with two $100 billion deals with Meta Platforms and OpenAI, as well as a large deal with Anthropic.
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In addition to its opportunity in inference, the company is also a leader in data center CPUs. The server CPU market is exploding due to the rise of agentic AI, with Bank of America recently projecting it will rise from $19 billion in 2025 to $180 billion in 2030. That's huge growth, and the Wall Street firm also expects AMD to continue to take market share in the space.
Finally, following its announced acquisition of World Labs, AMD is also looking to tackle the physical AI and robotics markets. World Lab is a leader in the spatial AI models that will eventually play a big role in these markets, positioning AMD to become a strong player in the space.
Given its opportunities in inference, agentic AI, and physical AI, this is a stock to own for the next decade.
3. Micron Technology Micron has posted spectacular gains over the past decade, with its stock going parabolic since the spring of 2025. These gains are tied directly to surging memory prices, as both DRAM (dynamic random access memory) and NAND (flash) have been in short supply. Much of this is tied to soaring AI demand, especially for HBM, which essentially needs to be packaged with GPUs.
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But while much of the industry is focused on HBM, Micron has actually benefited from being a next-generation memory laggard. Conventional memory prices have climbed faster than HBM, which has helped Micron's revenue and gross margins skyrocket. But here's the twist: Being the technology laggard isn't a good long-term strategy, and it is most exposed to ordinary memory prices normalizing.
So don't let the stock's cheap valuation fool you; this isn't the memory stock to own over the long term. I much prefer HBM leader and primary Nvidia supplier SK Hynix (SKHY -2.36%).
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Do plného rozběhnutí výsledkové sezony za třetí čtvrtletí ještě pár týdnů zbývá, už teď je ale jasné, že hlavní roli v ní tradičně sehrají velké technologické společnosti, které táhnou současný AI boom. Mimořádný vliv na celkový růst zisků firem pak budou mít hlavně dvě jména: Nvidia a Micron.
U obou těchto výrobců čipů nezbytných pro chod AI infrastruktury se podle analýzy serveru ZeroHedge, která vychází z odhadů Goldman Sachs a FactSet, očekává, že dohromady zajistí více než jednu třetinu růstu zisku na akcii (EPS) z celého indexu S&P 500. Nvidia se má na tom podílet z 19 procent, Micron z 15 procent. Třetí je Meta Platforms (7 %), následovaná Alphabetem (6 %) a Broadcomem (5 %).
Ještě pozoruhodnější ale je, že Nvidia a Micron mají společně vygenerovat větší přírůstek zisků než "spodních" 490 společností z indexu S&P 500 dohromady (34 % vs. 32 %). Celkově pak firmy zaměřené na AI infrastrukturu podle této analýzy vytvoří více než polovinu celkového růstu EPS indexu S&P 500 ve třetím čtvrtletí.
Tyto odhady perfektně ilustrují současnou fázi boomu kolem umělé inteligence. „Věříme, že jsme teprve ve třetí směně z devíti (přirovnání k zápasu baseballu, pozn. red.) a rozsah již schválených investic je toho důkazem,“ citoval server Yahoo Finance Dana Ivese, partnera ve společnosti Yorkville Ives.
„Výdaje pěti největších cloudových platforem na AI infrastrukturu letos dosahují přibližně 850 miliard dolarů, což je částka srovnatelná s americkými výdaji na obranu a patří mezi největší zdroje fixních investic v ekonomice,“ dodal Ives s tím, že Nvidii řadí mezi své top technologické investiční tipy.
Aktuálně nejhodnotnější veřejně obchodovaná společnost na světě s tržní kapitalizací blížící se šesti bilionům dolarů zůstává dominantním dodavatelem AI akcelerátorů pro datová centra. Čipy Nvidie nakupují technologičtí giganti jako Microsoft, Amazon, Alphabet nebo Meta Platforms, kteří mezi sebou vedou závod ve výstavbě AI infrastruktury. Právě jejich masivní kapitálové výdaje stojí za současnou explozí poptávky po AI hardwaru.
To Micron profituje především z enormní poptávky po pamětech HBM (High Bandwidth Memory), které jsou nezbytnou součástí výkonných AI serverů, a které se v posledních letech staly poněkud nedostatkovým zbožím, což vyhnalo jejich ceny násobně výš a pomohlo tak jejich výrobcům (nejen Micronu, ale i konkurenčním SK Hynix a Samsungu) k výraznému navýšení marží.
Ještě ale zpět k S&P 500 jako celku. Index by měl za právě skončené třetí čtvrtletí vykázat meziroční růst zisků o 29,5 procenta, píše Yahoo Finance. Pokud se tento odhad skutečně naplní, půjde podle FactSet jednak o třetí čtvrtletí s růstem zisků přesahujícím 25 procent v řadě a jednak o osmé čtvrtletí v řadě s dvouciferným meziročním růstem zisků.
Pro čtvrté čtvrtletí pak analytici z Wall Street očekávají růst zisků o 27,6 procenta; za celý rok 2026 odhady počítají s meziročním růstem firemních zisků o 32,4 procenta.
Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>
Here are the key points:
The overall setup for the Q3 earnings season remains very favorable, with earnings growth expected to be in the double digits for the 8th consecutive quarter. The growth momentum is broad-based, with 15 of the 16 Zacks sectors expected to enjoy positive earnings growth and the outlook steadily improving.Total S&P 500 earnings in Q3 are currently expected to increase +24.6% from the same period last year on +11.5% higher revenues. The revisions trend remains positive, sustaining the favorable revisions trend that has been in place for a year now. Since the start of Q3, earnings estimates have moved higher for half of the 16 Zacks sectors. We are seeing a similar trend for Q4 and full-year 2027 as well. Micron ((MU - Free Report) ) and Nvidia ((NVDA - Free Report) ) continue to be material contributors to the Tech sector’s growth picture. Excluding Nvidia, Micron, and Alphabet ((GOOGL - Free Report) ), which enjoyed an outsized gain in the preceding period, Q3 earnings for the rest of the Tech sector would be +20.7% (vs. +43.4% otherwise).Bank Earnings in the Spotlight
JPMorgan (JPM - Free Report) , Citigroup (C - Free Report) and Wells Fargo (WFC - Free Report) will kick off the Q3 reporting cycle for the Finance sector on Tuesday, October 13th. These bank stocks have lost ground lately in reaction to rising Treasury yields, as the one-year performance chart of JPMorgan and Wells Fargo shares relative to the S&P 500 index below shows.
Image Source: Zacks Investment Research
Over the last three months, when Treasury yields spiked higher, JPMorgan and Wells Fargo shares lost -0.3% and -6.2%, lagging the S&P 500 index’s +4.2% gain. We should keep in mind, however, that estimates for JPMorgan modestly increased, while those for Wells Fargo largely remained stable over this three-month period. Q3 estimates for the Finance sector as a whole increased since the start of the period.
Higher interest rates are generally seen as beneficial for these banks, but spiking yields of the type we have been experiencing are negative for these banks from several angles, ranging from causing paper losses at their available-for-sale bond portfolios to squeezed net interest margins through surging deposit betas and generally negative effects on credit demand and credit quality.
Trading volumes have remained very strong in recent quarters, but mid-quarter updates from management teams suggest that they will be below the levels seen in the preceding period. Negative developments in the treasury bond market have also clouded the outlook for deal flow, with several high-profile IPOs delayed as a result. It will be interesting to see how management teams, particularly JPMorgan’s leadership, will describe the operating environment on their earnings call next week.
For the sector as a whole, Q3 earnings are expected to increase by +3.4% from the same period last year on +6.3% higher revenues, which would follow the sector’s +22.4% earnings growth on +13.2% higher revenues in the preceding period.
The Earnings Big Picture
The chart below shows S&P 500 expectations for 2026 Q3 in terms of what was achieved in the preceding four periods and what is currently expected for the following three quarters.
Image Source: Zacks Investment Research
We have been showing here how Q3 estimates moved higher since the quarter got underway. Below, we show how estimates for the last quarter of the year have evolved in recent weeks.
Image Source: Zacks Investment Research
The chart below shows the overall earnings picture for the S&P 500 index on an annual basis.
Image Source: Zacks Investment Research
As is the case with estimates for 2026 Q4, estimates for full-year 2027 are also moving higher, as the chart below shows.
Image Source: Zacks Investment Research
Since the beginning of July, estimates for 2027 have increased for 10 of the 16 Zacks sectors, with Tech, Energy, Finance, and Industrials leading the way.
We will see how this revisions trend evolves as companies report Q3 results and share updates on developments in their businesses.
Comprehensive cross-platform coverage of the U.S. market close on Bloomberg Television, Bloomberg Radio, and YouTube with Scarlet Fu, Jess Menton, Carol Massar and Lisa Mateo. -------- More on Bloomberg Television and Markets Like this video?
While skeptics continue to view the memory providers through a traditional cyclical lens, structural demand from the AI boom has transformed the industry landscape.
Listen below or on the go on Apple Podcasts and Spotify
Skydance takes on streamers and tech giants. (0:14) Micron could triple as the memory boom accelerates. (1:20) SpaceX seeks $40B to load up on Nvidia chips. (1:39)
This is an abridged transcript of the podcast:
Our top story so far, David Ellison is betting on technology to reshape Skydance (SKYD), as it’s now known following the completion of the Paramount Skydance-Warner Bros. Discovery merger.
“Technology is reshaping how stories are created, distributed and experienced,” Ellison said in a memo to employees, obtained by Business Insider.
He said Skydance would “embrace technology - not just as a buzzword or as a side project, but as a fundamental capability of this company.”
Newly appointed co-CEO Ynon Kreiz said at a press conference that the company plans to use technology “to improve how we work; to amplify the creative process; to (conceive) better ways to engage consumers.”
The executives said they plan to deploy AI tools across the business, with Ellison describing AI as a “force multiplier.”
The technology push comes as Skydance faces competition not only from Netflix (NFLX), Walt Disney (DIS) and other entertainment companies, but also from technology companies including Apple (AAPL), Amazon (AMZN) and Meta Platforms (META). Ellison said the industry had failed to adapt quickly enough to those challengers.
“They allowed Netflix to disrupt their business,” he told reporters. “They allowed Amazon Prime Video to come and disrupt their business. They didn't transform, and they held on to the past for too long.”
Among active stocks, DA Davidson is expecting shares of Micron (MU) to triple to $3,000, with the stock on a growth trajectory for the next 3-5 years that it says the market has not yet acknowledged.
The firm boosted its target from $2,100, noting it expects memory demand to exceed supply in 2027 and 2028.
SpaceX (SPCX) is looking to raise $40B in a financing effort led by Apollo Global Management (APO) to purchase Nvidia (NVDA) chips, according to the FT.
And Unity Software (U) is higher after announcing it’s teaming up with Google (GOOG) (GOOGL) to build an integrated gaming platform coming later this year.
The companies also highlighted an experimental new Playground platform, available today, which allows users 18 and over to generate and customize playable games using natural language prompts, with no coding required.
In other news of note, is Webull (BULL) a China shop?
Shares of Webull are plunging more than 20% after a report that the trading platform is linked in "structural ways" with the Chinese government.
A bipartisan House Select Committee on China report seen by CNBC said: "Webull's ownership architecture, technical workforce, technology infrastructure, cross-border data routing, corporate financing, and compliance frameworks are tied in structural ways to the People's Republic of China."
And in the Wall Street Research Corner, tech bull Dan Ives touts some familiar names in his list of top tech stocks for 2027.
The former Wedbush analyst initiated tech coverage at his new merchant bank Yorkville Ives with Nvidia (NVDA), Microsoft (MSFT), Palantir (PLTR), Apple (AAPL) and CrowdStrike (CRWD) as his favorite plays.
“In our view, investors underestimating the scale and scope of this $4 trillion dollar spending wave next few years," Ives posted.
He also chose Tesla (TSLA) as his favorite tech disruptor play.
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. But finding a growth stock that can live up to its true potential can be a tough task.
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.
Our proprietary system currently recommends Micron (MU - Free Report) as one such stock. This company not only has a favorable Growth Score, but also 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 GrowthEarnings growth is arguably the most important factor, as stocks exhibiting exceptionally surging profit levels tend to attract the attention of most investors. For growth investors, double-digit earnings growth is highly preferable, as it is often perceived as an indication of strong prospects (and stock price gains) for the company under consideration.
While the historical EPS growth rate for Micron is 31.9%, investors should actually focus on the projected growth. The company's EPS is expected to grow 133.9% this year, crushing the industry average, which calls for EPS growth of 59.8%.
Cash Flow GrowthCash is the lifeblood of any business, but higher-than-average cash flow growth is more beneficial and important for growth-oriented companies than for mature companies. That's because, high cash accumulation enables these companies to undertake new projects without raising expensive outside funds.
Right now, year-over-year cash flow growth for Micron is 459.8%, 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 49.2% over the past 3-5 years versus the industry average of 10.4%.
Promising Earnings Estimate RevisionsBeyond the metrics outlined above, investors should consider the trend in earnings estimate revisions. A positive trend is a plus here. Empirical research shows that there is a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
There have been upward revisions in current-year earnings estimates for Micron. The Zacks Consensus Estimate for the current year has surged 11.3% over the past month.
Bottom LineMicron has not only earned a Growth Score of A based on a number of factors, including the ones discussed above, but it also carries a Zacks Rank #1 because of the positive earnings estimate revisions.
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.
Nvidia (NVDA -0.93%) is the world's most valuable publicly traded company, but it may not hold that title in a few years. Memory chip maker Micron (MU +3.81%) has a real shot at taking the crown. Fundamentals and growth rates are on Micron's side as both companies continue to outperform the S&P 500.
Micron may soon generate more revenue per quarter than Nvidia The recent memory chip boom has closed the gap between Micron and Nvidia. Looking at what both companies did last year and then comparing it to their most recent earnings releases will paint the picture.
Micron's fiscal 2025 fourth quarter featured $11.3 billion in revenue, while Nvidia earned $46.7 billion in its fiscal 2026 second quarter. Nvidia brought in more than 4 times Micron's revenue during that time.
Now, let's fast-forward a year to the present day. Micron's fiscal 2026 fourth-quarter results revealed $54.2 billion in revenue, while Nvidia's fiscal 2027 second-quarter sales were $96.2 billion. A more than 4x difference in Nvidia's favor shrank to a 1.8x difference in one year.
Image source: Getty Images.
Guidance also favors Micron, with the memory chip maker projecting 13.4% sequential growth at the midpoint. Nvidia's midpoint implies $108 billion in revenue, which would be a 12.2% sequential jump. Both companies beat guidance in their most recent earnings results, but Micron is growing faster. Furthermore, they both have sky-high net profit margins, with Micron's edging out Nvidia's in the most recent quarter.
Micron is trading at a steep discount Micron and Nvidia both trade at lower valuations than the S&P 500, but the gap between Micron and Nvidia is tremendous. While Micron trades at a forward P/E ratio of 7, Nvidia is valued at a much higher 23. Micron would have to more than triple in price to reach Nvidia's valuation, which would put the stock close to a $4 trillion market cap.
That discount will become more striking if Micron continues to outpace Nvidia with year-over-year and sequential revenue growth. Continued memory chip shortages fuel the likelihood of that scenario.
While investors can't expect Micron to deliver 379% year-over-year revenue growth forever, its eventual deceleration may be slow. Nvidia has already demonstrated that a tech giant at the center of the AI trade can still double its revenue year over year.
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Multiyear strategic customer agreements minimize the risk of cyclical decline One of the bearish concerns surrounding Micron is that it is a cyclical business. Memory chip sales surge, chipmakers produce more of them, and then a slowdown in chip sales results in massive inventory gluts.
Micron is already experiencing hypergrowth in its sales, but bears have worried about an eventual slowdown that could force Micron to cut prices, incur steep year-over-year revenue declines, and wind up with narrow margins.
However, the AI trade is different. Tech executives and political leaders have described it as the Fourth Great Industrial Revolution. The demand for agentic AI alone will keep Micron busy for multiple years, and physical AI will also require more memory chips.
These tailwinds also lift Nvidia, but based on past results, Micron has benefited even more than the largest AI chipmaker. As Micron continues to deliver impressive growth rates, this bearish concern will increasingly find itself in the rearview mirror, and that can help Micron command a similar valuation to Nvidia.
Right now, Micron trades at a $1.2 trillion market cap, and Nvidia has a $5.8 trillion market cap. The gap is wide now, but as Micron has been catching up in total revenue, Nvidia's market cap lead may shrink quickly as well.
As 10-year Treasury yields hit 5.3%, Siebert Financial CIO Mark Malek breaks down why top AI growth stocks can still “outrun the avalanche.” He lays out 3-tier tech framework, the best dip-buying opportunities in Nvidia and Micron, and the consumer stocks to “avoid like the plague.”
Micron Technology (MU +3.81%) has crossed into territory that would have sounded ridiculous a few years ago: the stock has risen 485% over the last year, now trading above $1,000 per share and valuing the company at $1.2 trillion. Naturally, this ascent raises an obvious question. Is a stock split coming?
Plenty of technology companies have split their shares after big rallies in recent years. In the semiconductor landscape, Nvidia and Broadcom both completed a 10-for-1 split in 2024. Micron presents an interesting case. The company is generating record profits and mountains of cash thanks to the artificial intelligence (AI) memory boom.
During the company's fiscal fourth quarter earnings call last week, management told investors exactly what it wants to do with excess cash. That plan centers on buying back stock -- not splitting it.
Image source: Getty Images.
What would a Micron stock split accomplish? Investors should understand what a stock split does -- and what it doesn't do. If Micron announced a 10-for-1 split with its shares trading around $1,100, an investor owning one share worth $1,100 would instead own 10 shares worth $110 apiece.
As you can see, Micron's market capitalization wouldn't suddenly change. The reason is because a stock split does not make the underlying business any more valuable. In reality, stock splits generally made shares more accessible to smaller investors. That's less important today because many brokerages offer fractional shares, allowing someone to invest $50 in Micron regardless of whether a full share costs over $1,000.
While a split would make Micron's shares appear more affordable and potentially increase interest among retail investors, it would mostly just be for optics. As a result, any pop Micron stock could experience after conducting a split would likely be a fleeting byproduct of momentum traders.
Micron is generating record levels of cash The AI memory supercycle has completely transformed Micron's business. AI data centers require enormous amounts of high-bandwidth memory (HBM) and high-capacity DRAM used alongside AI accelerators.
In fiscal 2026 (ended Sept. 3), Micron generated record revenue of $133.2 billion -- up 256% from the prior year. Management believes this growth isn't a one-quarter windfall. Micron has signed 26 strategic customer agreements (SCA), which are estimated to account for over 35% of revenue through 2030. Meanwhile, remaining performance obligations (RPO) have reached approximately $150 billion.
Tight industry supply combined with surging demand from hyperscalers has pushed memory pricing sharply higher over the last year. The company's net income reached nearly $85 billion in fiscal 2026, while adjusted free cash flow soared from just $3.7 billion in fiscal 2025 to an astounding $62.3 billion.
That brings me to share repurchases. Micron spent just $650 million buying back shares under its repurchase program last year. That's barely 1% of the free cash flow it generated. Micron's CFO Mark Murphy told investors that the company wants to return excess cash primarily through share repurchases. Per management's commentary, capital returns are expected to begin around Dec. 9.
Forget a stock split, watch for share repurchases instead While Micron will need cash to expand manufacturing capacity and fund research and development (R&D), AI-driven memory demand remains strong. Micron exited fiscal 2026 with a $68.3 billion net cash position while generating $62.3 billion of adjusted free cash flow. Management actually expects first-quarter fiscal 2027 free cash flow to be "significantly higher" than the $33.2 billion generated during the fourth quarter. To me, the company has substantial room for larger buybacks in the coming years.
So, will Micron stock split? It's certainly possible, and the four-digit stock price gives management a logical reason to consider one. But there is currently a more direct way to create shareholder value right now.
Micron is producing more cash than at any point in its history, and management is focused on sending excess cash back to shareholders. When speaking about additional buybacks, Murphy stated, "You can assume that we will seek additional authorization in the near term."
Investors shouldn't buy Micron stock because you're hoping a stock split will lead to a new rally. Instead, smart investors should watch what happens if management follows through with substantially larger stock buybacks. Over time, the declining share count could matter far more to investors than whether Micron trades for $1,000 or $100 per share in the near-term.
Micron Technology shares MU climbed on Wednesday despite broader pressure on equities from higher oil prices and rising Treasury yields, after DA Davidson analyst Gil Luria raised his price target on the memory-chip maker to $3,000 from $2,100.
The new target implies roughly 190% upside from the stock’s trading level on Wednesday, suggesting Luria expects Micron shares to nearly triple as the company benefits from a sustained boom in artificial intelligence infrastructure.
The stock was up about 2.39% around mid-morning.
Investors are still "early in their journey" when it comes to understanding Micron Technology and valuing its stock, Luria said.
The analyst argued that the market has yet to fully reflect Micron’s expected growth over the next three to five years.
He also believes the company’s current valuation remains unusually low compared with the earnings growth it is expected to deliver.
Luria’s $3,000 target is based partly on the expectation that investors will eventually assign a higher valuation multiple to each dollar of Micron’s earnings.
His forecast assumes Micron trades at about 19 times estimated earnings per share for fiscal 2027, which ends in August.
The stock currently trades at roughly six times estimated earnings for that year, according to Dow Jones Market Data.
Micron shares have already risen about 230% this year, but the stock’s valuation multiple has actually fallen since the end of 2025 as earnings expectations have increased faster than the share price.
Memory chip supply to remain tight for several yearsA key part of Luria’s bullish thesis is the expectation that demand for memory chips will exceed supply for several years.
The rapid expansion of AI data centers has transformed the outlook for memory manufacturers.
AI systems require large quantities of advanced memory to process increasingly complex models, with high-bandwidth memory, or HBM, becoming particularly important for AI accelerators.
"Memory is a lever for better AI performance. AI models generate better results with more memory, run faster with more memory," Luria wrote.
That dynamic could give Micron greater pricing power if supply remains constrained while chipmakers and cloud companies continue expanding AI infrastructure.
Micron is one of the major global suppliers of DRAM and HBM memory, positioning it to benefit from the increasing memory intensity of AI servers.
Luria also identified a potential share repurchase program as another catalyst for Micron stock.
The company is expected to launch a major buyback program in December after becoming free of significant restrictions on share repurchases that were attached to its government funding under the US CHIPS Act.
Share buybacks reduce the number of shares outstanding, allowing a company’s earnings to be spread across fewer shares.
That can increase earnings per share and potentially support a higher stock valuation, particularly when earnings are already growing rapidly.
With the stock already up 230% this year and Luria pointing to nearly triple-digit upside from here, Micron is likely to remain a name long-term investors keep watching through investment apps.
Separately, a union representing workers at Micron’s operations in Taiwan said on Wednesday that its members had authorized a strike over a dispute concerning the company’s bonus and profit-sharing arrangements.
The union, which represents employees at Micron’s operations in Taoyuan, said 1,994 members, or 99% of those who voted, supported strike authorization.
The timing and details of any industrial action have yet to be decided.
Taiwan is a critical manufacturing base for Micron, particularly for DRAM and HBM chips used in AI servers.
A strike could therefore add another layer of uncertainty to an already tight global memory market.
The union said it still hoped Micron would put forward a concrete profit-sharing proposal before workers resorted to a strike.
It is encouraging members to take a day off on October 19 to attend a rally in Taipei, which it said would not constitute a strike.
Micron employs around 15,000 people in Taiwan, with separate unions representing workers at its Taoyuan and Taichung facilities.
The two unions together represent more than 80% of the company’s Taiwan workforce.
Mediation between Micron and the Taoyuan union ended without an agreement in September, while negotiations with the Taichung union remain ongoing.
The dispute centers on Micron’s rewards for fiscal 2026, which the company announced in September after what it described as an "extraordinary year."
More than 60,000 employees globally were eligible for rewards, including a T$1 million ($31,386) cash bonus for employees in Taiwan.
The Taoyuan union said the package did not address its demand for a permanent profit-sharing mechanism.
It also criticized Micron for announcing the rewards while labour mediation was underway without first reaching an agreement with the union.
Micron has not linked the fiscal 2026 rewards to the labour dispute.
The company said Wednesday that it takes employees’ concerns seriously and remains committed to engaging with its unions in good faith.
"We will continue to work through the established dialogue and mediation processes," Micron said, adding that it would hold another mediation session with the Taichung union later this month.
Taiwan’s labour ministry said it respected the union’s strike vote and urged Micron to consider workers’ concerns, make concrete proposals and continue negotiations.
In this video, I will cover Micron's (MU +4.03%) latest earnings report and explain why the market is not rewarding the results and what it means for the stock going forward. Watch the short video to learn more, consider subscribing, and click the special offer link below.
*Stock prices used were from the trading day of Oct. 1, 2026. The video was published on Oct. 1, 2026.
Neil Rozenbaum has positions in Micron Technology. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool has a disclosure policy. Neil 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.
Investors interested in Computer - Integrated Systems stocks are likely familiar with Micron (MU) and Silicon Motion (SIMO). But which of these two stocks is more attractive to value investors?
Tzv. kreativní destrukce bývá někdy mylně vztahována k nějakému „očišťování“ ekonomiky během recesí a krizí. Bez ohledu na to, že během nich může úplně zbytečně padnout i řada zdravých firem. Joseph Schumpeter tento koncept používal ve vztahu ke konkurenci. Tedy k inovacím a k tomu, že tvořením nového zaniká něco staré. Možná bychom mohli ještě lépe mluvit o neustálé transformaci, ale to nechme nyní stranou. Dnes se chci podívat na kreativní destrukci a výbuch ziskovosti v polovodičích a souvisejících sektorech.
Následující obrázek ukazuje vývoj marží společností vyrábějících polovodiče a paměťové čipy. Zejména v druhém případě došlo v posledním roce k prudkému růstu toho, jaké zisky generují firmy z každého dolaru tržeb. Zatímco dříve mohl být standard zhruba na 30 – 40 centech, nyní je to více než dvojnásobek. U polovodičů došlo ke zvýšení z cca 50 – 60 centů na necelých 70:
Zdroj: X
Goldman Sachs přidává ke grafu i předpovědi dalšího vývoje pro následující dva roky. Podle nich by marže měly být v podstatě stabilní. Což obecně znamená, že by poptávka měla zůstat silná, nemělo by zároveň dojít ke zostření konkurenčních tlaků, které by marže tlačily dolů. A neměly by přijít nákladové tlaky, které by měly stejný efekt. Nejde přitom samozřejmě o sektory a aktivity, které by byly vyloženě lehce kopírovatelné. A kde by vybudování nových výrobních kapacit trvalo pár měsíců. I přesto se ale můžeme ptát, jak velkým lákadlem by výše uvedené mělo být pro nové společnost, celkové rozšiřování kapacit, inovace posouvající aktivitu a zisky k jiným firmám?
Je dobré si uvědomit, že na akciovém trhu a v indexu S&P 500 je řada společností, které mají marže vysoko nad nějakým průměrem, nebo mediánem. Samotné marže ale nejsou konečným ukazatelem toho, jestli firmy vydělávají „hodně“, nebo „málo“. Tudíž i toho, jestli jsou lákadlem pro jiné. Celkový obrázek je tu v kostce následující:
Ukazatelem onoho „hodně zisků, nebo málo“ je to, kolik firma vydělává ve srovnání s tím, jako cenu má kapitál, který jí financuje. Pokud by tato cena – požadovaná návratnost, byla třeba na 10 % ročně a firma na tento kapitál vydělávala jen 5 %, vydělává skutečně málo. A pohled na ní nebude asi u jiných podnikatelů budit nadšení k tomu, aby se vydali podobným směrem. Něco jiného by ale bylo, pokud by společnost generovala (po delší dobu) třeba 20 % návratnost.
Marže jsou samozřejmě důležitým faktorem, který zmíněnou návratnost ovlivňuje. Ale ne jediným. Záleží také na celkové velikosti tržeb a na tom, kolik kapitálu/aktiv je třeba na generování těchto tržeb. Vysokou návratnost kapitálu tak může dosahovat i společnost, která má velmi nízké marže, ale vysoké tržby (relativně k jejím aktivům a tudíž kapitálu). Nebo firma s vysokými maržemi, která nemusí mít hodně tržeb. Nyní pár konkrétních čísel:
Třeba Sandisk Corp dosahoval před fiskálním rokem 2026 negativní návratnosti aktiv a investic, v roce letošním je ale na 90 % návratnosti. Vydělal tedy téměř tolik, kolik má kapitálu financujícího jeho aktivity. Micron Technology dosahoval návratnosti investovaného kapitálu maximálně něco nad 10 %, v letošním roce je na 63 %. NVIDIA se už po roce 2024 přesunula na úrovně kolem 100 % návratnosti kapitálu. Taiwan Semiconductor se postupně posunul z úrovní nad 20 % nad 30 %. Broadcom velmi zhruba z úrovní pod 20 % ke 30 %.
Příběhy to jsou tedy na jednu stranu dost rozdílné, návratnost investovaného kapitálu se pohybuje od velmi nízkých desítek procent po úrovně u 100 %. Na stranu druhou jsou to příběhy podobné. V tom smyslu, že všude je nyní návratnost kapitálu pod požadovanou. Tu přitom nemusíme ani konkrétně počítat, protože je jasné, že je mnohem níže: Bezrizikové sazby jsou u 5 % a rizikové prémie v řádech desítek procent asi u těchto firem namístě nejsou.
Podle grafu tedy nějaká kreativní destrukce současného stavu v následujících pár letech nepřijde. Nejen marže, ale (hlavně) návratnost kapitálu ve zmíněných sektorech po ní ale celkem mohutně volají. V minulosti byla přitom řada firem, jejichž pozice se zdála neotřesitelná. Východoindické společnosti, ve své době Ford, GE, nebo třeba IBM. Ani tehdy nikdo nevěděl, kdy a jak jim zaklepe na dveře kreativní destrukce, respektive transformace. Ale v době „tentokrát jinak“ možná přijde nějaká překvapení. A mimochodem, konkrétní vývoj dost souvisí se schopností vnitřní firemní transformace. Která zase stojí na schopnosti vzdát se, nebo změnit to, co kdysi bývalo silnou stránkou. O tom někdy příště.
DA Davidson raised its Micron (NASDAQ: MU) stock price target from $2,100 to a Street-high $3,000, maintaining a “Buy” rating on October 7.
The new price target implies a roughly 42% increase potential from the firm’s last forecast of $2,100 given less than a week ago.
According to analyst Gil Luria, the latest target follows Micron’s strong fiscal fourth-quarter results and above-consensus fiscal 2027 guidance, as well as management’s indication that memory markets could remain even tighter in 2028.
As such, DA Davidson’s valuation framework applies a 19x market multiple to its fiscal 2027 earnings-per-share estimate (EPS), reflecting the expectation that Micron deserves a premium valuation as its growth profile becomes more evident.
This represents a notable shift from D.A. Davidson’s earlier $2,100 Micron stock price target, which was based on a 13x multiple to forward earnings.
“We concluded that investors are early in their journey of understanding MU’s value and believe that journey will lead them to assigning a far higher multiple. We reiterate the Buy rating and increase our price target to $3,000 from $2,100, a 19x market multiple on our FY27 EPS estimate,” Luria wrote.
Investors will become more confident in Micron, analyst says At the core of D.A. Davidson’s thesis is the claim that investors are still early in understanding Micron’s value. In other words, as the market gains greater confidence in the company’s earnings power, artificial intelligence (AI) demand, and longer-lasting memory supply constraints, investors will assign Micron a significantly higher valuation multiple.
Micron’s recent results provide support for the argument. Notably, the company reported $54.23 billion in fiscal fourth-quarter revenue, up 379% year-over-year (YoY), while adjusted EPS surged 1,003% to $33.42. Furthermore, for fiscal Q1 2027, Micron guided to $61.5 billion in revenue and $38.15 in adjusted EPS, highlighting the continued strength of AI-related memory demand.
The latest DA Davidson forecast is significantly more bullish than Wall Street’s average MU share price forecast for the next 12 months, which sits at $1,630 according to TipRanks data.
MU price forecast. Source: TipRanks As for the “Buy” recommendation, it is in line with the majority of analysts who have rated the company in the past three months, as the same data shows that the stock currently enjoys a “Strong Buy” consensus.
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Investors climbed the "wall of worry" toward all-time highs in the S&P 500 (SPX) and Nasdaq-100 (NDX) in a tech-led rally, says Kevin Mahn. He addresses reports that Nvidia (NVDA) and Micron (MU) are expected to lead to one-third of the S&P's earnings growth next year, though he sees opportunities in other corners of Wall Street.
A jury handed Netlist a $445 million win against Micron, but collecting that money was another battle entirely. What Netlist ultimately accepted, and why Micron agreed to pay even more, reveals how high the stakes had quietly become.
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Micron Technology (NASDAQ:MU | MU Price Prediction) agreed on October 5, 2026, to pay Netlist (OTC:NLST) $600 million over five years. That is more than the $445 million jury verdict at the center of their patent fight.
Micron never paid the verdict and was still appealing, so the settlement gives Netlist cash it couldn’t collect.
Why Micron Paid More Than the Verdict A Texas jury found in May 2024 that Micron’s memory modules infringed two Netlist patents, awarding $425 million on one and $20 million on the other. The Patent Trial and Appeal Board later ruled the asserted claims of both unpatentable, and Micron filed notice of appeal in July 2025.
The settlement, announced October 6, releases all pending proceedings and voids the verdict. Micron also gets a five-year license to Netlist’s worldwide portfolio, covering patents an appeal could never reach.
This matters because Netlist asked the International Trade Commission in late September to block imports of Micron chips used in AI systems. An import ban stops product from reaching customers, whereas damages only cost money.
Small Payments for Micron Mean Big Revenue for Netlist In fiscal fourth quarter 2026, Micron posted revenue of $54.23 billion, net income of $37.70 billion, and free cash flow of $33.20 billion. Each $30 million quarterly fee equals about 0.06% of that quarter’s revenue.
Measure Micron Netlist Settlement payments $30 million paid per quarter $120 million received per year Share move on announcement Down 1.73% to $1,045.56 Up 17.88% to $6.66 Netlist’s gain reflects $120 million each year, on trailing revenue of $332.69 million.
Netlist Collects From Two Memory Giants Netlist struck a similar deal with Samsung in August 2026, with $239 million upfront and quarterly fees of up to $32.9 million. Chief executive C.K. Hong said, “The agreement with Micron further validates the value of our AI memory technologies.”
With two licensees paying, Netlist’s income depends less on future verdicts. However, Micron fees stop in 2031, patents age, and fewer unlicensed targets remain.
Why Micron Matters More Micron is capital-intensive and cyclical. Its 87.0% gross margin depends on tight supply, and memory cycles have turned before. Netlist’s revenue comes largely from reselling other makers’ DRAM at thin margins, so most of its value depends on licensing.
Micron has the stronger outlook of the two companies. It guided fiscal first quarter 2027 revenue to $61.5 billion, plus or minus $1.5 billion, with more than 75% of 2027 output already committed. Micron has 26 strategic customer agreements with take-or-pay volumes and $32 billion in customer commitments, which should cushion the next downturn. The main risk is oversupply once new fabs ramp in 2027 and 2028.
Contact [email protected] for any questions or corrections.
One Wall Street firm just slapped a price target on Micron so far above the Street consensus that it demands either serious examination or serious skepticism, and the argument behind it could change how you think about memory stocks entirely.
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DA Davidson raised its price target on Micron Technology (NASDAQ:MU | MU Price Prediction) to $3,000, according to DA Davidson from $2,100, according to DA Davidson and kept its Buy rating. That is an aggressive target. Against the current share price of $1,017.37, DA Davidson’s target means 194.9% upside. The call comes as Micron stock has slipped 4.48% over the past week and 2.7% in premarket trading, after a 256.68% gain so far this year.
Ticker Company Firm Action Old Rating New Rating Old Target New Target MU Micron Technology DA Davidson Price target raised Buy Buy $2,100 $3,000 A price target is one analyst’s estimate of where a stock could trade, usually over about the next 12 months. It is an opinion, and it guarantees nothing. The Street’s average target is $1,535.57, so DA Davidson stands well apart from the consensus.
Why DA Davidson Says Micron Trades on the Wrong Multiple DA Davidson argues that “investors are early in their journey of understanding Micron’s value, and that journey will lead them to assigning a far higher multiple.”
A multiple is the price investors pay for each dollar of earnings. Memory manufacturers have historically traded at low multiples because their profits swing hard with each pricing cycle. Micron trades at a trailing P/E of 14 and about 7x forward earnings. DA Davidson’s view is that AI has made memory a durable growth business, and durable growth businesses earn higher multiples.
What Has to Go Right for $3,000, according to DA Davidson The case needs several years of strong growth to play out. Micron has signed 26 Strategic Customer Agreements, which it expects to cover over 35% of revenue through 2030, leaving about $150 billion in outstanding contract commitments. The CFO said “even at floor prices, we expect margins meaningfully above any prior cycle peak margins.”
Three things to track:
Revenue growth in every quarter of fiscal 2027, starting from guidance of $61.5B ± $1.5B Gross margin holding above the fiscal Q1 floor of about 86.25% Agreement coverage moving toward management’s target of about 50% of revenue Bear Case Investors Cannot Ignore Memory has gone through severe downturns in the past, and supply is on the way. Micron expects first-half fiscal 2027 capex of about $25 billion, with new fabs coming online between mid-calendar 2027 and calendar 2030. If rivals add capacity at the same time, pricing could reverse quickly. Barron’s says the stock needs a memory price test. Reuters reports that a Micron union in Taiwan has approval to strike.
The call comes after a 433.3% one-year gain, in a stock with a beta of 2.226. That beta means the stock has historically moved more than twice as much as the broader market.
Credible Call or a Stretch? The multiple argument is credible. Multi-year contracts, cash down payments and sold-out capacity give Micron more visibility than it has had in any earlier cycle. The $3,000 number is a stretch on a 12-month horizon, though, according to DA Davidson. Getting there requires a repricing the rest of the Street has not yet accepted. For retirement-focused investors, this call is a reason to research Micron more closely, with attention to the stock’s history of sharp swings (we studied the traits early-stage AI winners shared before their monster runs in a free playbook here: The Next Nvidia Playbook).
Contact [email protected] for any questions or corrections.
Tech StocksA D.A. Davidson analyst thinks investors aren’t properly appreciating the company’s growth potential or the impact of an upcoming buyback program
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Investors are still “early in their journey” when it comes to understanding Micron Technology and how to value its stock, according to an analyst.
D.A. Davidson’s Gil Luria believes investors haven’t properly taken into account the company’s expected growth trajectory over the next three to five years, he said. Likewise, he suggested that the stock’s dirt-cheap valuation multiple doesn’t reflect its true worth.
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About the Author
Hannah Pedone is a New York–based technology reporter for MarketWatch.
Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?
Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Micron (MU - Free Report) .
Micron currently has an average brokerage recommendation (ABR) of 1.30, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 43 brokerage firms. An ABR of 1.30 approximates between Strong Buy and Buy.
Of the 43 recommendations that derive the current ABR, 34 are Strong Buy and five are Buy. Strong Buy and Buy respectively account for 79.1% and 11.6% of all recommendations.
Brokerage Recommendation Trends for MU
Check price target & stock forecast for Micron here>>>
While the ABR calls for buying Micron, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.
Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation.
This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements.
Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision.
ABR Should Not Be Confused With Zacks RankAlthough both Zacks Rank and ABR are displayed in a range of 1--5, they are different measures altogether.
Broker recommendations are the sole basis for calculating the ABR, which is typically displayed in decimals (such as 1.28). The Zacks Rank, on the other hand, is a quantitative model designed to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them.
In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.
Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns.
Another key difference between the ABR and Zacks Rank is freshness. The ABR is not necessarily up-to-date when you look at it. But, since brokerage analysts keep revising their earnings estimates to account for a company's changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in indicating future price movements.
Should You Invest in MU?Looking at the earnings estimate revisions for Micron, the Zacks Consensus Estimate for the current year has increased 11.3% over the past month to $176.61.
Analysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason for the stock to soar in the near term.
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. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Therefore, the Buy-equivalent ABR for Micron may serve as a useful guide for investors.
Micron just posted 481% gains on AI memory demand, but the real debate is whether new money buys into a cyclical peak or the early innings of a multiyear supercycle. Three scenarios tell very different stories about where a $5,000…
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A $5,000 stake in Micron Technology (NASDAQ:MU | MU Price Prediction) buys about 4.65 shares at the model’s starting price of $1,074.89. Early Monday the stock traded at $1,066.18. Over the past year the stock gained 481.18% on AI memory demand. So the real question for new money is how much upside remains through 2031.
Base Case: Your $5,000 Could Grow to $5,661.50 by 2031 A $5,000 investment could be worth about $5,661.50 by 2031 under the base case, a total return of 13.23%. That rests on a projected five-year share price of $1,217.05 on October 4, 2031, which works out to 2.52% a year.
Confidence in the model is rated high (0.9). The model’s one-year target is $1,071.04, which it describes as near fair value (-0.4%).
Bull, Base and Bear: Where Your $5,000 Could Land Scenario 2031 Target Price Total Return Annualized Return Value of $5,000 Bull $1,911.44 77.83% 12.2% $8,891.50 Base $1,217.05 13.23% 2.52% $5,661.50 Bear $741.27 -31.04% -7.16% $3,448 Analysts on Wall Street are more upbeat than the model. The consensus analyst target is $1,520.02, and 92% of covering analysts are bullish: 9 Strong Buy, 36 Buy, 3 Hold and 1 Strong Sell. That target has only a 0.3 weight in the model.
It leans heaviest on forward earnings, and it applies a brake because Micron is now a mega-cap stock. At about 6x forward earnings, the market is viewing today’s profits as a cyclical peak. That doubt explains why the expected outcome looks modest.
Three Forces That Could Push Your Stake Higher Contracted Revenue Through 2030 Micron has signed 26 strategic customer agreements. It expects them to account for over 35% of revenue through 2030. Every agreement includes take-or-pay volumes.
Customer financial commitments total $32 billion, and remaining performance obligations are about $150 billion. Contracts like these could help smooth the boom-and-bust swings that have long held down memory stock valuations.
Memory Supply Can’t Keep Up Management expects supply and demand to be “much tighter in calendar 2027 and 2028 than they were in 2026”. It also said Micron does “not have line of sight to when supply and demand will return to balance.” More than 75% of calendar 2027 output is already committed.
Micron is also working with NVIDIA (NASDAQ:NVDA) on a custom HBM4E implementation. Fiscal fourth-quarter revenue came in at $54.229B, up 379.27% year over year, with an 87.0% non-GAAP gross margin.
Earnings Estimates Keep Rising and Cash Is Coming Back to Shareholders Consensus EPS for fiscal 2028 is $205.2990, up from $163.3470 90 days ago. Fiscal first-quarter guidance calls for revenue of $61.5B ± $1.5B and EPS of $38.15 ± $1.
Starting December 9, 2026, Micron plans to step up capital returns, and over time it intends to return 100% of excess cash to shareholders, mostly through buybacks. Its net cash stands at $68.3 billion. Chief Executive Sanjay Mehrotra said the agreements “provide added confidence in the durability of Micron’s financial performance.”
Risks That Could Shrink Your $5,000 Memory has always been cyclical. On Monday, Barron’s reported that Micron shares were slipping on fears of a memory-price peak. Analysts disagree sharply about how big earnings will get: fiscal 2028 EPS estimates run from $136.0000 to $335.5000. If AI infrastructure spending cools off, or if new industry capacity comes online faster than expected, pricing could reverse quickly.
Spending is also climbing. Capex hit $30.712B in fiscal 2026, up 93.68%, and management expects higher outlays in fiscal 2027. New fabs take years to ramp, so any delay would push back revenue.
With a beta of 2.22, Micron moves far more than the broader market, so even a stake that ends up near the expected value could take a rough path to get there. The model’s own quarterly base-case path sinks as low as $1,032.52 along the way.
What $5,000 in Micron Could Look Like by 2031 Across the three scenarios, a $5,000 Micron stake ranges from $3,448 in the bear case to $8,891.50 in the bull case, landing at $5,661.50 as the base case.
Contract length and tight supply favor the upside, while the memory cycle is the main threat. Watch HBM pricing and capex discipline in coming earnings reports. The projections here are not investment advice or a guarantee.
Contact [email protected] for any questions or corrections.
Here are three stocks with buy rank and strong momentum characteristics for investors to consider today, October 7:
Micron Technology, Inc. (MU - Free Report) : This seller of memory and storage products worldwide has a Zacks Rank #1 and witnessed the Zacks Consensus Estimate for its current year earnings increasing 6.8% over the last 60 days.
Micron’s shares gained 10.2% over the last three months compared with the S&P 500’s advance of 3.9%. The company possesses a Momentum Score of A.
Equinor ASA (EQNR - Free Report) : This explorer and producer of petroleum and related products has a Zacks Rank #1 and witnessed the Zacks Consensus Estimate for its current year earnings increasing 10.6% over the last 60 days.
Equinor’s shares gained 25.5% over the last three months compared with the S&P 500’s advance of 3.9%. The company possesses a Momentum Score of A.
Oceaneering International, Inc. (OII - Free Report) : This offshore energy, defense, aerospace and robotics services provider has a Zacks Rank #1 and witnessed the Zacks Consensus Estimate for its current year earnings increasing 11.1% over the last 60 days.
Oceaneering’s shares gained 9.3% over the last three months compared with the S&P 500’s advance of 3.9%. The company possesses a Momentum Score of B.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Learn more about the Momentum score and how it is calculated here.
Michael Burry is becoming more aggressive against three of the market’s biggest AI winners.
The Big Short investor has replaced outright bearish positions in Nvidia, Palantir and Micron with longer-dated put options extending into 2027, saying research pushed forward his timeline for an AI downturn.
The timing is contrarian, as Nvidia closed Tuesday at $239.24, valuing it near $5.8 trillion, Palantir ended at $192.07, and Micron at $1,045.56.
Burry’s thesis is not that AI demand disappears, but expectations may already leave too little room for disappointment.
Nvidia sits at the centre of the AI capital-spending cycle, which makes it the clearest test of Burry’s argument.
The stock is approaching a $6 trillion valuation, yet Wall Street remains bullish.
BNP Paribas analyst Karl Ackerman recently raised his target to $345, arguing Nvidia can sustain gross margins above 70% and maintain its dominant share of AI computing because of its hardware and CUDA software ecosystem.
That confidence is exactly what makes the bearish case interesting.
The risk is not necessarily collapsing GPU demand. It is whether hyperscaler capital spending can continue rising fast enough to support expectations already embedded in Nvidia’s price.
Panmure Liberum strategist Joachim Klement warned through MarketWatch that upcoming earnings and 2027 guidance could deliver an AI “reality check” if hyperscaler spending disappoints.
Burry is therefore betting against the valuation investors attach to Nvidia’s dominance, rather than the technology.
Palantir offers the cleanest valuation argument of the three. The shares trade around $192; the average Wall Street target tracked by Investing.com is about $195.57, leaving little consensus upside despite strong growth.
Jefferies analyst Brent Thill remains an Underperform. “The setup gets harder from here,” Thill said, according to TipRanks, even after raising his target to $80 from $70.
Jefferies acknowledged Palantir’s accelerating US business, where revenue rose 115% last quarter, but argued comparisons become much tougher as expectations climb and international growth moderates.
That is where Burry’s positioning makes sense.
Palantir does not need to stumble operationally for the stock to fall. If investors have already priced in exceptional revenue growth, expanding margins and rapid AI monetisation, merely delivering good results may not be sufficient.
Micron stock looks cheap but memory remains cyclicalMicron is the most nuanced part of Burry’s trade because the stock looks inexpensive despite its rally.
Shares closed Tuesday at $1,045.56 and trade at 5.9 times forward earnings. The company just reported record revenue, an 87% adjusted gross margin and strong guidance as AI demand collides with tight memory supply.
Burry’s bearish thesis instead focuses on what happens when supply catches up.
He sees scarcity, rather than demand alone, as an important force behind memory pricing and expects new production capacity over the next two years to pressure the cycle.
Bank of America analyst Vivek Arya provides the bullish counterpoint. Memory prices and margins “will inevitably normalize at some point,” he said.
Arya still rates Micron Buy because he believes earnings could remain far above prior-cycle peaks even in a downturn.
That distinction captures Burry’s broader bet. Nvidia can remain dominant, Palantir can keep growing and Micron can stay profitable while their stocks still fall if expectations reset.
His puts are a wager against the price of perfection.
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The management team expects industry shortages to worsen in 2027 and 2028.
*Stock prices used were the afternoon prices of Oct. 3, 2026. The video was published on Oct. 5, 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.
Top Wall Street analysts changed their outlook on these top names. For a complete view of all analyst rating changes, including upgrades and downgrades, please see our analyst ratings page.
Keefe, Bruyette & Woods cut the price target for PJT Partners Inc (NYSE:PJT) from $195 to $159. Keefe, Bruyette & Woods analyst Alex Bond downgraded the stock from Outperform to Market Perform. PJT Partners shares closed at $139.65 on Tuesday. See how other analysts view this stock.BTIG cut Redwood Trust Inc (NYSE:RWT) price target from $6 to $5. BTIG analyst Douglas Harter maintained a Buy rating. Redwood Trust shares closed at $3.44 on Tuesday. See how other analysts view this stock.Evercore ISI Group raised price target for NetApp Inc (NASDAQ:NTAP) from $210 to $300. Evercore ISI Group analyst Amit Daryanani upgraded the stock from In-Line to Outperform. NetApp shares closed at $228.45 on Tuesday. See how other analysts view this stock.Needham boosted the price target for Marvell Technology Inc (NASDAQ:MRVL) from $300 to $400. Needham analyst N. Quinn Bolton maintained a Buy rating. Marvell Technology shares closed at $287.01 on Tuesday. See how other analysts view this stock.TD Cowen cut Yum! Brands Inc (NYSE:YUM) price target from $180 to $177. TD Cowen analyst Andrew M. Charles maintained a Buy rating. Yum! Brands shares closed at $139.84 on Tuesday. See how other analysts view this stock.Morgan Stanley lowered S&P Global Inc (NYSE:SPGI) price target from $525 to $477. Morgan Stanley analyst Toni Kaplan maintained an Overweight rating. S&P Global shares closed at $396.13 on Tuesday. See how other analysts view this stock.Cantor Fitzgerald boosted Humana Inc (NYSE:HUM) price target from $300 to $460. Cantor Fitzgerald analyst Sarah James upgraded the stock from Neutral to Overweight. Humana shares closed at $404.27 on Tuesday. See how other analysts view this stock.Morgan Stanley increased the price target for Zscaler Inc (NASDAQ:ZS) from $165 to $185. Morgan Stanley analyst Hamza Fodderwala maintained an Equal-Weight rating. Zscaler shares closed at $212.25 on Tuesday. See how other analysts view this stock.Cantor Fitzgerald increased Chubb Limited (NYSE:CB) price target from $330 to $333. Cantor Fitzgerald analyst Ryan Tunis maintained a Neutral rating. Chubb shares closed at $334.21 on Tuesday. See how other analysts view this stock.DA Davidson raised Micron Technology Inc (NASDAQ:MU) price target from $2,100 to $3,000. DA Davidson analyst Gil Luria maintained a Buy rating. Micron shares closed at $1,045.56 on Tuesday. See how other analysts view this stock.Considering buying NTAP stock? Here’s what analysts think:
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A Micron Technology facility is seen in Taoyuan, Taiwan, September 17, 2026. REUTERS/Ann Wang Purchase Licensing Rights, opens new tab
CompaniesTAIPEI, Oct 7 (Reuters) - A Taiwan union representing workers at Micron Technology (MU.O), opens new tab said on Wednesday it had secured authorisation from its members to strike over a dispute concerning the company's bonus scheme, escalating a labour conflict at the chipmaker's largest manufacturing hub.
The union, which represents workers at Micron's operations in the northern city of Taoyuan, said 1,994 members, or 99% of those casting ballots, voted in favour of a strike. It said details of any strike, including its timing, were still under discussion.
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Taiwan is a crucial production centre for Micron's DRAM and high-bandwidth memory (HBM) chips, key components in AI servers. A labour action could amplify supply concerns in an already tight memory-chip market.
The union said it still hoped the company would put forward a concrete profit-sharing proposal for employees before it resorted to a strike. It is encouraging members to take a day off on October 19 to join a rally in Taipei, which it said would not be a strike.
Micron employs about 15,000 people in Taiwan, with separate unions representing workers at its Taoyuan and Taichung operations.
Mediation with the Taoyuan union ended without agreement in September, while the Taichung union remains in negotiations.
Together, the two unions represent more than 80% of Micron's Taiwan workforce.
Micron in September announced fiscal 2026 rewards for more than 60,000 employees globally following what it described as an "extraordinary year" for the company. That included Taiwan employees receiving a T$1 million ($31,386) cash bonus.
However, the Taoyuan union said the package failed to address its demand for a permanent profit-sharing mechanism and criticised Micron for announcing them while labour mediation was underway without first reaching an agreement with the union.
Micron, which has not linked its fiscal 2026 rewards to the labour dispute in Taiwan, said on Wednesday it took employees' concerns seriously and remained committed to engaging with its unions in good faith.
"We will continue to work through the established dialogue and mediation processes," the company said, adding that it would hold a further mediation session with the Taichung union later this month to work towards a constructive solution.
Taiwan's labour ministry said on Wednesday in a written statement to Reuters that it respected the union's strike vote and urged Micron to consider workers' concerns, put forward concrete proposals and negotiate with the union.
($1 = 31.8610 Taiwan dollars)
Adds details, company and ministry comments in paragraph 3, 10-12
Reporting by Wen-Yee Lee; Writing by Ben Blanchard; Editing by Clarence Fernandez, Muralikumar Anantharaman and Kim Coghill
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Micron Technology (MU -1.73%) has been a clear winner in the artificial intelligence (AI) boom in recent quarters. The company sells the memory power and storage that are crucial elements as AI is applied to real-world situations, and demand has soared.
This has translated into explosive revenue growth and high profitability on sales, and the latest earnings report reinforced this trend. Last week, in the fiscal fourth-quarter report, Micron said revenue surged more than 300% to $54 billion, and gross margin topped 86%. Investors have recognized this AI strength and piled into the stock, pushing it to a gain of more than 270% this year.
Of course, amid general concerns about a potential slowdown in AI spending and the possibility of additional interest rate hikes to tame inflation, some investors now hesitate to get in on high-growth AI stocks. So, you might be wondering: Is it too late to buy Micron? Or is the stock a buy after the company's latest explosive earnings report? Let's consider the bull and bear cases.
Image source: Getty Images.
The bull case for MicronAs mentioned, Micron's earnings growth has taken off in recent quarters, driven by the need for memory and storage in the AI market. In fact, demand has been so strong that it's led to a shortage of supply, and memory prices have surged. So, though Micron faces competition, there's plenty of business for all of the top players.
Micron has even put into place strategic customer agreements (SCAs) that offer it visibility on revenue ahead; the company says it has signed SCAs that reach into 2031. This ensures supply to the customer and a certain level of revenue for Micron.
It's also important to keep in mind that AI is just starting to be used by companies to address their problems and needs, and this suggests we're in the early stages of the growth story. Memory and storage are essential in the processes of agentic AI, or the use of AI to take steps on behalf of humans. All of this means that Micron earnings could continue to soar, and the stock price may follow.
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The bear case for MicronMicron and rivals are addressing the memory shortage and ramping up production, and as supply comes online, this could lead to a decline in prices. Morningstar analysts predict memory supply will double by 2028, and this will push prices lower over the following three years. This could make Micron less profitable on sales and weigh on growth.
Meanwhile, any potential slowdown in the AI infrastructure build-out may significantly hurt Micron's revenue and demand for the stock price. So far, the need for memory remains high, and tech giants aim to spend nearly $700 billion this year alone on infrastructure. But investors have questioned whether this pace will continue into the coming years. This is a risk for Micron as well as other chip players.
Though Micron isn't particularly expensive from a valuation perspective, trading at 6x forward earnings estimates, investors, seeing its tremendous gains in recent times, may focus on the risks I've talked about here and prefer to turn to an AI stock that's earlier in its growth story.
Should you buy Micron?The Micron story right now looks bright, and the stock may have more fuel in the tank over the coming year. However, it's possible we'll see a pullback at some point, or even stagnation, as memory supply strengthens.
Your decision about whether to invest right now depends on your comfort with risk. Aggressive investors may pick up Micron shares today and benefit as this growth story continues, but cautious investors might prefer to buy on an eventual dip further down the road.
The memory business has always been cyclical, with growth that ebbs and flows, and this may continue even if this AI-driven cycle is longer. Micron may not be a buy for every investor today, but the company is well-positioned to win over the long term, even if it must first traverse a slowdown. And this makes it a stock all investors should at least keep on their radar screens.
Micron Technology (MU -1.73%) and Sandisk (SNDK -2.56%) have emerged as major winners of the artificial intelligence infrastructure build-out, and both stocks have delivered exceptional returns for shareholders. In the past year, Micron is up 460% and Sandisk is up 1,190%.
Despite those gains, most Wall Street analysts believe the stocks are undervalued.
Sandisk's median target price of $2,225 per share implies 34% upside from its current share price of $1,660.Micron's median target price of $1,575 per share implies 50% upside from its current share price of $1,045.History offers a more sobering perspective. The memory chip industry has long been prone to boom-and-bust cycles. Memory stocks tend to fall sharply during downturns, and the next one may be right around the corner.
Image source: The Motley Fool.
Micron and Sandisk have benefited from higher memory chip prices driven by the AI boomCentral processing units (CPUs) and graphics processing units (GPUs) are logic chips that process data and execute instructions. Both play an essential role in artificial intelligence (AI). CPUs handle general-purpose computing and run applications, while GPUs accelerate demanding tasks by offloading repetitive calculations, such as the matrix and vector math common in AI.
Meera Pandit, global market strategist at JPMorgan Chase, explains:
"CPUs store information in NAND, or long-term memory, and use dynamic random access memory (DRAM), or working memory, to perform tasks. For example, HBM, or high bandwidth memory, is a special kind of DRAM used to feed GPUs data fast enough to keep them busy."Today, memory chipmakers are struggling to keep pace with demand as hyperscalers race to expand AI infrastructure. A severe memory chip supply shortage has made NAND and DRAM more expensive, with prices increasing 70% and 160%, respectively, since January 2025. Favorable market conditions have translated into strong financial results from Micron and Sandisk.
Micron is the third-largest supplier of NAND and DRAM, and it gained share in both markets during the past year. In the September quarter, revenue rose 379% to $54 billion, and non-GAAP net income soared to $33.42 per diluted share, an 11-fold increase from $3.03 per diluted share in the same quarter last year.
Sandisk is the sixth-largest supplier of NAND, but it did not gain market share over the past year. In the July quarter, revenue rose 372% to $9 billion and non-GAAP net income soared to $39.25 per diluted share, a 135-fold increase from $0.29 per diluted share in the same quarter last year.
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History says shares of Micron and Sandisk will fall sharply during the next industry downturnUnlike logic chips, memory chips are considered commodities because products from one supplier are generally interchangeable with products from another. That means companies like Micron and Sandisk compete primarily on price rather than product differentiation, so they are ultimately at the mercy of supply and demand.
Historically, the memory chip industry has alternated between periods of undersupply and oversupply, causing prices to increase and decrease, respectively. The last boom-and-bust cycle took place during the pandemic. Memory prices increased amid strong demand for consumer electronics, but prices cratered when demand normalized.
Indeed, NAND and DRAM prices dropped about 70% between early 2021 and late 2023. In turn, shares of Micron and Western Digital (NASDAQ: WDC), the former parent company of Sandisk, dropped 50% and 60%, respectively. And those losses occurred despite the stocks having reasonable valuations. After reporting fiscal 2021 financial results, Micron traded at 12 times adjusted earnings and Western Digital traded at 14 times adjusted earnings.
So what? Today, Micron trades at 14 times adjusted earnings and Sandisk trades at 24 times adjusted earnings. Those valuations look tolerable, especially when Micron and Sandisk are expected to report annual earnings growth of 65% and 89%, respectively, through fiscal 2028. But the stocks are more expensive today than they were when the last memory cycle peaked.
NAND and DRAM prices have already declined from their peaks earlier this year, and prices are likely to fall further as memory chip companies expand production capacity. In turn, lower prices will pressure earnings at Micron and Sandisk, and investors may begin pricing in that deterioration well before it appears in their financial results.
Shares of Micron and Sandisk currently trade 14% and 29% below their highs, respectively. But history says both stocks could drop much further as memory chip supply catches up with demand. For that reason, I think investors should keep any positions in Micron and Sandisk relatively small. These stocks look cheap, but that’s because the market is nervous about the cyclical nature of the memory chip industry.
SummaryMicron Technology is experiencing a major shift as data center SSDs now comprise over 70% of its NAND revenue, driving rapid growth.Enterprise SSD demand is forecast to grow over 80% this year, offsetting potential weakness in consumer NAND and supporting robust pricing.MU’s strategic pivot to data center SSDs is enhancing business resilience, with revenue and margin improvements evident in recent quarters.I maintain a Buy rating and $1,500 fair value (~41% upside), with increased confidence in MU’s NAND earnings durability. JHVEPhoto/iStock Editorial via Getty Images
In an article last month, I argued that DRAM and not NAND was more durable in Micron’s (MU) business. I thought NAND would normalize quickly. After what we saw in Q4, this
Sandisk (SNDK -2.56%) has gained more than 613% so far in 2026, and Micron Technology (MU -1.73%) is up less but still a lot at a modest 272%. At times this year, both stocks were up even higher than these percentages. Both numbers trace back to the same tailwind: the artificial intelligence (AI) data center build-out has created a memory shortage severe enough that suppliers could set their own prices.
The question for anyone looking at these stocks today isn't whether AI memory demand is real. It clearly is. Which of these two already-massive winners still has the most room left to climb this year and into the future?
Image source: Getty Images.
Sandisk's story is almost entirely about NAND flash Sandisk, spun off from Western Digital last year, makes NAND flash, the memory used for long-term storage rather than active computing. At a recent Goldman Sachs-sponsored technology conference, Sandisk representatives said data centers now make up more than half the entire NAND market, a shift it called a watershed moment, according to Investing.com. At the conference, leadership said that Sandisk has signed eight long-term supply agreements with major data center customers over the past nine months and has already booked roughly two-thirds of its fiscal 2028 bit supply.
The company is also developing a new product called High Bandwidth Flash, aimed at solving a memory bottleneck in AI inference workloads. That's a genuinely strong position. But Sandisk's own fiscal fourth-quarter revenue jump, up 372% year over year, was driven heavily by pricing rather than shipping more chips, NAND prices have risen so quickly that there's a real question about how long that can last. Historically, prices have come back down once new supply catches up, per market research firm TrendForce. The stock has already wobbled over concerns that the valuation may be getting ahead of itself. In other words, Sandisk is riding a huge AI-driven memory boom with strong demand and new products, but the stock is also facing a real risk that today's soaring prices (and valuation) may not last.
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Micron's growth is broader and arguably less fully priced in Micron makes both NAND and DRAM, which is the faster memory used for active computing, and its fiscal 2026 numbers are staggering in their own right: record revenue of $133.2 billion for the year, with fourth-quarter DRAM revenue alone up 343% to $39.8 billion. The more important detail is where that DRAM growth is coming from.
Micron is working with Nvidia (NVDA +0.14%) on what it describes as the industry's first custom high-bandwidth memory, or HBM, design, built specifically around Nvidia's chip roadmap rather than sold as an off-the-shelf part. That kind of co-designed relationship is harder for a rival to copy than simply building more factories. At the same time, Micron's data center SSD revenue approached $10 billion last quarter, more than 10 times what it was a year earlier, according to Benzinga.
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This all sounds wordy and confusing, but in short, Micron is effectively competing in Sandisk's own market while also starting to run a franchise tied directly into Nvidia's AI chip plans, and its stock has still risen at a slower rate than Sandisk's has this year. Sandisk has already had its run, and in the long term, Micron has more room and more chances to bring in cash.
I'd lean toward Micron here. It's winning in storage at the same time Sandisk is, while also capturing the DRAM and HBM side of the AI memory boom, where Nvidia's reliance on custom-designed chips gives Micron a stickier, harder-to-replace role.
From an analyst perspective, both have Strong Buy ratings, but Goldman Sachs' analysts see greater upside for Micron, with expectations for strong revenue and guidance this quarter and into the future.
