TLDR
- Micron Technology (MU) stock surged 315% over the past year, driven by AI memory demand, but trades at $411.66 versus a DCF fair value estimate of $189.89
- The company exited consumer PC market in late 2025 to focus exclusively on AI memory production as RAM prices are expected to jump 50% in Q1 2026
- Micron broke ground on a $100 billion semiconductor factory in upstate New York that will employ over 9,000 people when completed
- Q1 fiscal 2026 revenue climbed 57% year-over-year to $13.6 billion with DRAM accounting for 79% of sales and net margin hitting 28.15%
- The stock trades at a forward P/E of 10.57 and PEG ratio of 1.12, below its calculated fair P/E ratio of 63.06x
Micron Technology stock has rocketed 315% over the past 12 months as artificial intelligence applications create unprecedented demand for memory hardware. The rally pushed shares to $411.66, though valuation models suggest investors may be paying a premium for future growth.
The Boise-based company dominates the memory hardware market alongside Samsung and SK Hynix. These three firms control virtually the entire global supply of DRAM and RAM chips. AI’s hunger for memory has created a shortage that Intel CEO Lip-Bu Tan expects to persist until at least 2028.
DRAM prices are forecast to increase 50% in the first quarter of 2026 alone. This pricing power has translated directly to Micron’s bottom line.
Revenue for the first quarter of fiscal 2026 reached $13.6 billion, up 57% year-over-year. DRAM accounted for 79% of that total, confirming AI as the primary growth driver. The company’s gross margin hit 56.8% while operating margin reached 32.5% and net margin landed at 28.15%.
Strategic Shift Toward AI
Micron exited the consumer PC market in late 2025 to concentrate resources on AI memory production. The decision reflects management’s confidence in long-term AI infrastructure demand.
Last month, the company broke ground on a $100 billion semiconductor factory in upstate New York. The facility will employ over 9,000 workers and become the largest semiconductor manufacturing plant in the United States once operational.
The investment positions Micron as the dominant American supplier of memory hardware. This geographic advantage could prove valuable as governments prioritize domestic chip production.
Valuation Concerns Surface
A discounted cash flow analysis estimates Micron’s intrinsic value at $189.89 per share. At the current price of $411.66, shares trade 116.8% above this DCF-based fair value. This gap suggests the stock may be overvalued on a fundamental basis.
However, multiple-based metrics paint a different picture. Micron trades at a forward P/E ratio of 10.57, well below the semiconductor industry average of 43.44x. The company’s PEG ratio stands at 1.12 compared to Samsung’s 3.31.
A proprietary fair P/E calculation of 63.06x also sits above Micron’s actual P/E of 38.91x. This comparison indicates the stock screens as undervalued when adjusting for growth rates and company-specific factors.
The stock gained 7.3% over seven days, 13.5% over 30 days, and 30.5% year-to-date through its last close. Trading volume averaged 33 million shares with a market capitalization reaching $463 billion.
Micron scores 3 out of 6 valuation checks for being undervalued. The mixed signals reflect tension between traditional DCF models and growth-adjusted multiples.
Analyst forecasts project free cash flow reaching $20.38 billion by 2030, up from $5.84 billion in the latest twelve-month period. These projections underpin both bullish and cautious views on current valuation levels.
The company’s dividend yield sits at 0.11% with a gross margin of 45.53%. The 52-week range spans from $61.54 to $455.50.
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