Lead
Micron Technology (MU) has become one of the market’s most watched names as the company rides a surge in demand tied to the AI hardware build-out. Since being added to Zacks Rank #1 on August 20, 2025, the stock has climbed sharply — hitting an all-time intraday high of $455 before a recent pullback — and is already more than 40% higher in 2026. Strong, structurally driven demand for high-bandwidth memory and modern DRAM variants pushed Micron to a record $37.38 billion in FY25 sales and earnings near multi-year highs of $8.29 per share. Analysts and earnings revisions point to continued upside, with Wall Street modeling a pronounced EPS jump in FY26 and FY27.
Key Takeaways
- Micron (MU) saw FY25 sales of $37.38 billion and EPS of $8.29, driven by memory tightness and pricing power.
- Wall Street projects FY26 EPS of $33.22 (a ~300% year-over-year rise) and FY27 EPS of $44.95, reflecting explosive margin and volume growth.
- EPS estimates for FY26 and FY27 have climbed 78% and 91% respectively over the past 60 days, with year-ago revisions up 207% and 490%.
- Shares more than tripled in the prior year, reached a $455 all-time intraday high, and are up over 40% so far in 2026 after a recent pullback.
- Micron trades near 12x forward earnings, below peers SanDisk (23x) and Western Digital (31x), implying a relative valuation discount.
- Products in heaviest demand include HBM, server-class DRAM, and DDR5 — all critical inputs for GPUs, accelerators, and modern servers.
Background
The global memory market has swung from cyclical oversupply at times to a prolonged capacity shortage as AI workloads pushed demand for high-bandwidth memory. HBM, which sits alongside server DRAM and DDR5 in Micron’s portfolio, is currently the most supply-constrained memory type due to its central role in AI accelerators and GPU architectures. Major AI chipmakers such as Nvidia, AMD and cloud providers have dramatically expanded orders for HBM and large-capacity DRAM, compressing available supply and elevating pricing.
Micron’s rise follows multi-year investments in advanced nodes and packaging to expand production of HBM and DDR5. Industry consolidation, long equipment lead times, and high capital intensity for new fabs mean supply cannot be ramped instantly — a structural dynamic that supports sustained elevated pricing and utilization. Investors have noticed: consensus earnings models and sell-side revisions have flipped from pessimistic to aggressively positive in recent quarters.
Main Event
Micron reported fiscal results and guidance that far outpaced prior expectations, with FY25 revenue at $37.38 billion and EPS near $8.29. Following that performance, sell-side models adjusted sharply: FY26 EPS is now forecast at $33.22 and FY27 EPS at $44.95, with those estimates rising materially over the past two months. The scale of upward revisions has been dramatic — recent percentage gains in consensus EPS expectations measure in the double- and triple-digits compared with year-ago projections.
Share-price action reflected the fundamental surprise. The stock more than tripled over the previous 12 months, reached a peak near $455 per share, and despite a pullback, remained more than 40% higher year-to-date in 2026. Since its inclusion on Zacks Rank #1 on August 20, 2025, the share-price increase measures roughly 865%, underscoring how concentrated interest has become around Micron amid the AI hardware expansion.
Operationally, the demand is concentrated in specific product lines: HBM for accelerators, server-class DRAM for data centers, and DDR5 for newer client and enterprise systems. Each of these products has seen order books expand and lead times extend, constraining channel inventories and allowing Micron to exercise pricing power without immediate supply-side relief from competitors.
Analysis & Implications
The supply/demand imbalance for high-end memory looks structural rather than transitory. AI model training and inference place unusually heavy demands on memory bandwidth and capacity, making HBM and large-capacity DRAM uniquely valuable inputs. Because fabs and advanced packaging capacity take years and tens of billions of dollars to scale, the market’s current tightness may persist across multiple fiscal years, supporting sustained margin expansion for leading suppliers.
Micron’s valuation at roughly 12x forward earnings appears modest next to other growth-oriented technology names and direct memory peers trading at 23x (SanDisk) and 31x (Western Digital). The lower multiple reflects the memory sector’s historical cyclicality, but the magnitude of anticipated EPS growth — including a projected ~300% jump in FY26 — narrows traditional valuation objections and presents a case for continued share appreciation if execution and market conditions hold.
Risks remain. Demand could normalize if AI hardware architectures evolve to use less HBM per unit, if large fabs come online faster than expected, or if macro weakness dampens data-center spending. Conversely, further tightening or design wins with major OEMs/cloud providers would amplify revenue and margin upside. Investors should weigh the asymmetric payoff but also monitor capacity announcements and end-market demand signaling closely.
Comparison & Data
| Metric | Micron (MU) | SanDisk | Western Digital |
|---|---|---|---|
| Forward P/E (approx.) | 12x | 23x | 31x |
| FY25 Sales / EPS | $37.38B / $8.29 | — | — |
| FY26 EPS (est.) | $33.22 | — | — |
| FY27 EPS (est.) | $44.95 | — | — |
The table highlights Micron’s combination of rapidly rising EPS estimates and a comparatively low forward P/E ratio versus memory-sector peers. The blank cells for competitors reflect that this piece relies on the consensus figures emphasized in market commentary rather than a full peer-detail audit; readers should consult primary filings or analyst reports for exhaustive peer metrics. The contrast suggests investors are pricing in continued margin recovery for Micron while assigning higher multiples to other memory incumbents.
Reactions & Quotes
Market commentary and research notes emphasized the structural nature of demand and the rapid shift in consensus earnings models.
“Micron has held a spot on the coveted Zacks Rank #1 since August 20, 2025, reflecting sustained positive EPS revisions and strong fundamentals.”
Zacks Investment Research
“The surge in AI hardware demand has made HBM and DDR5 the tightest memory categories today, pressuring supply and lifting prices.”
Zacks Investment Research analytics summary
Public investor forums and trading flows also reflected heightened retail and institutional interest after the earnings surprises; that interest amplified intraday volatility but also contributed to persistent liquidity and attention to Micron’s order-book developments.
Unconfirmed
- Whether the FY26 and FY27 consensus EPS targets ($33.22 and $44.95) will be fully realized remains dependent on sustained pricing and volume trends; these projections are forward-looking and not guaranteed.
- Timing and scale of new fab capacity from competitors or foundry partners that could alleviate HBM/DDR5 tightness are not publicly confirmed and could materially change the supply outlook.
- The persistence of data-center and cloud spending at projected levels is subject to macroeconomic conditions that could damp demand unexpectedly.
Bottom Line
Micron stands at the intersection of structural demand drivers and favorable supply dynamics: AI-driven consumption of HBM and modern DRAM variants supports record sales and rapidly rising EPS expectations. The company’s current forward P/E near 12x, when combined with consensus EPS acceleration for FY26 and FY27, creates a compelling risk/reward profile for investors who accept memory-sector cyclicality.
Careful monitoring of capacity expansion announcements, channel inventories, and OEM/cloud order patterns will be decisive in judging how durable the rally is. For investors, the case for continued upside depends on execution against strong order backlogs and on the absence of faster-than-expected supply relief; conversely, any sign of structural demand erosion would warrant a reassessment of valuation and positioning.
Sources
- Zacks Investment Research — financial media report summarizing market data and analyst revisions.