Micron (MU) Stock Has Rallied 300% and Still Looks Cheap – Here’s Why

TLDR

• Micron (MU) stock has surged ~300% over the past year, from the low-$60s to around $430, yet its forward P/E sits at just 12.4 — roughly 46% below the sector median.
• Wall Street expects Micron’s revenue to hit $76 billion in fiscal 2026, up 103% year over year, with EPS forecast to quadruple to $33.92.
• High-bandwidth memory (HBM) is fully sold out for 2026, with some hyperscalers receiving only half the memory they need.
• Micron’s Cloud Memory Business Unit posted ~66% gross margins in Q1 2026, with corporate gross margins guided to ~68% for Q2.
• If Micron’s valuation converges toward peer multiples, analysts suggest the stock could reach the mid-$600s to low-$700s range.

Micron Technology stock has done something unusual: it tripled in price while simultaneously getting cheaper on a valuation basis.

Micron Technology, Inc., MU

Over the past twelve months, MU has climbed from the low-$60s to around $430. That’s a roughly 300% gain. Yet the forward non-GAAP P/E has compressed to about 12.4 — nearly half the sector median — because earnings estimates have grown even faster than the stock price.

The PEG ratio tells the same story. At around 0.21, versus a sector median near 1.5, the market is still pricing Micron as if this growth won’t last.

Wall Street disagrees, at least for now. Revenue is forecast to reach $76 billion in fiscal 2026, more than double the prior year. EPS is expected to jump from $7.59 in fiscal 2025 to $33.92 this year — a near quadrupling. Over the past three months, all 28 analyst estimate revisions have been upward.

For fiscal Q2 2026, consensus sits around $18.7–$18.9 billion in revenue, roughly 135% above the same quarter last year, with non-GAAP EPS near $8.50 — implying 445% growth year over year.

Supply Is the Constraint, Not Demand

The supply-demand picture is straightforward. HBM is fully sold out through 2026 under locked price and volume contracts. DDR5 spot prices are up around 30% year-to-date, and DRAM and NAND contract prices have added another 30% in early 2026.

Some hyperscalers are reportedly receiving only half to two-thirds of the memory they want. That gives Micron both pricing power and the ability to direct supply to its highest-margin customers.

The total addressable market for HBM alone was $35 billion in 2025 and is expected to grow 40% annually through 2028, putting it on track toward $100 billion by the end of the decade.

Micron’s Cloud Memory Business Unit — which covers HBM and premium data-center DRAM — posted gross margins of around 66% in Q1 2026. Corporate gross margin was 56.8% in Q1, and management has guided to roughly 68% for Q2, an 11-percentage-point improvement in a single quarter.

Free cash flow margin hit nearly 30% in Q1 — a record for the company. In the same period, Micron paid down roughly $2.7 billion in debt and repurchased around $300 million in stock.

Long-Term Capacity Build

Micron plans to invest around $200 billion in US and allied manufacturing over the long term, including a projected $100 billion mega-fab complex in New York State. It’s also building a $24 billion silicon-wafer fab in Singapore and acquiring DRAM facilities in Taiwan from Powerchip Semiconductor for about $1.8 billion.

Those costs are partially offset by up to $6.1 billion in CHIPS Act funding and a 25% advanced manufacturing tax credit.

On valuation, if Micron trades up to a forward P/E of 20 — still well below the Nasdaq-100 average of 24.5 — the implied price would be around $660. Using peer EV/Sales and EV/EBITDA medians, the blended upside points toward the low-$700s.

The current Street price target cluster sits around $390, which MU has already surpassed.

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