Key Highlights
- Micron (MU) shares have climbed 122.9% in the last six months, significantly outpacing the tech sector’s modest 3.4% rise.
- Explosive growth in AI-related memory products including DRAM, NAND, and High Bandwidth Memory (HBM) is propelling the company forward, with HBM inventory completely reserved through 2026.
- Second-quarter fiscal 2026 sales skyrocketed 196% year-over-year to reach $23.86 billion, while non-GAAP earnings per share jumped 682% to $12.20.
- BofA Securities maintains a positive stance on Micron, highlighting projections that global AI infrastructure spending will approach $1.4 trillion by 2030.
- After the substantial rally, MU still trades at a forward price-to-earnings ratio of approximately 5-6, well under the sector median of 23.43.
Micron Technology (MU) has delivered a remarkable 122.9% return over the past half-year, establishing itself as among the top-performing chip stocks currently available. This performance dramatically exceeds the broader Zacks Computer and Technology sector’s 3.4% gain during the identical timeframe.
The driving force behind this impressive rally is clear: investments in artificial intelligence infrastructure are ramping up rapidly, with memory semiconductors playing a critical role. As cloud computing facilities expand to accommodate increasingly complex AI operations, requirements for Micron’s DRAM, NAND flash, and particularly High Bandwidth Memory (HBM) products have intensified. The company’s HBM3E and HBM4 chip allocation is completely booked for all of calendar year 2026.
NVIDIA announced in 2025 that Micron serves as a primary HBM provider for its GeForce RTX 50 Blackwell graphics processing units. Demand for HBM4 technology is being substantially influenced by NVIDIA’s forthcoming Vera Rubin platform.
Micron is simultaneously expanding its HBM advanced packaging operations in Singapore to accommodate this accelerating demand. BofA Securities analysts indicated on April 7 that worldwide AI infrastructure expenditures are projected to nearly triple, reaching $1.4 trillion by 2030, positioning Micron favorably within the memory semiconductor space as cloud providers and government entities modernize their technology infrastructure.
Earnings performance that commands attention
During the second quarter of fiscal 2026, Micron’s sales reached $23.86 billion, representing a 196% year-over-year increase. Non-GAAP earnings per share registered at $12.20, marking a 682% surge compared to the corresponding period one year earlier. Both metrics substantially exceeded Street projections — revenue surpassing estimates by 21.67% and EPS beating forecasts by 38.57%.
Non-GAAP gross profitability expanded dramatically to 74.9%, compared with 37.9% in the prior-year quarter. Operating profit soared to $16.46 billion from $2.01 billion. For the complete fiscal 2026 year, market analysts anticipate revenue expansion of 194% and EPS growth of 604%.
The expansion narrative extends further. Fiscal 2027 consensus projections indicate an additional 58.5% revenue climb and 63.9% earnings per share acceleration.
The valuation case remains compelling
Despite the substantial share price appreciation, Micron currently trades at a forward price-to-earnings multiple of roughly 5 to 6 — substantially below the sector benchmark of 23.43. By comparison, Marvell Technology commands a 26.74x multiple, Texas Instruments trades at 31.23x, and Intel carries an 87.21x valuation.
A significant long-term investment thesis centers on AI inference workloads. Unlike model training operations, which occur periodically, inference executes continuously each time users engage with operational AI applications. This dynamic means memory requirements scale directly with AI utilization, not merely with model expansion. Micron’s HBM3E and LPDDR5X products are engineered specifically for this operational environment.
There’s also the edge computing AI opportunity that receives less market attention. Self-driving vehicles, intelligent manufacturing facilities, and robotic surgical systems all require localized memory that handles compressed AI algorithms directly on-device. This relies on LPDDR and embedded NAND technologies — representing a secondary demand channel for Micron that operates independently from data center investment cycles.
BofA highlighted that while certain analysts have expressed concerns regarding Micron potentially reaching “peak profitability,” the stock currently trades near the lower boundary of its historical valuation range. Micron has also pledged to deploy more than $25 billion in capital expenditures during fiscal 2026 as it expands production capacity.
