We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Micron Has More Firepower Left in Its Cylinder for the Long Term
Read MoreHide Full Article
Micron Technology Inc. (MU - Free Report) witnessed a meteoric rise in its stock price in the first half of 2026, rallying nearly 340%. However, the stock price has been witnessing softness in the past two and a half months. This has opened a tremendous opportunity for both short- and long-term investors.
MU is set to continue its blockbuster performance at least through 2027 on extremely tight supply of DRAM, soaring demand for high-bandwidth memory (HBM), new Strategic Customer Agreements (SCAs) to reduce earnings and cash flow volatility and effective strategic investment.
The chart below shows the price performance of MU year to date.
Image Source: Zacks Investment Research
Excellent Business Opportunity
Micron has been benefiting tremendously from the enormous application of artificial intelligence (AI) in day-to-day life, which has pushed up the demand for memory chips. The four major hyperscalers are likely to raise their AI capital expenditure budget to more than $1 trillion next year and further beyond 2027.
This has resulted in more AI semiconductor sales, implying the need for multiple AI memory chips to operate. Flash memory technologies like DRAM and NAND are used in AI chips, enabling them to perform optimally.
The demand for AI-enabled memory chips is also robust. In their last earnings reports, all four major hyperscalers highlighted a shortage of memory and storage chips, resulting in soaring prices of these products. This situation is set to persist in 2027 and can improve slowly but steadily only in 2028.
MU’s gross margin climbed to 84.9% in the third quarter of fiscal 2026 from 74.9% in the prior quarter and 39% in the year-ago period. This proves how the HBM shortage is helping high-end memory developers increase prices in a world of AI-powered data center boom.
New Tech Trends to Drive Prospects
The performance of any AI model depends on memory performance and capacity. MU’s HBM is a highly sought-after product for NVIDIA Corp. (NVDA - Free Report) , Advanced Micro Devices Inc. (AMD - Free Report) and Alphabet Inc. (GOOGL - Free Report) to name a few, for their AI-enabled chipsets.
Micron has meaningful exposure to AI, cloud data centers, industrial IoT and autonomous vehicles, all of which require increasingly advanced memory solutions. As AI adoption accelerates, demand for DRAM and NAND products continues to rise.
NVIDIA identified Micron as a key HBM supplier for its GeForce RTX 50 Blackwell GPUs, reinforcing its importance within the AI supply chain. Demand for HBM4 is also benefiting from next-generation AI infrastructure deployments, including NVIDIA’s Vera Rubin platform.
Long-Term SCA Deals
Micron has signed 16 SCAs covering customers across data centers, consumer markets and automotive. Most agreements run for five years through 2030, while automotive deals generally run for three years. Together, the contracts represent about 20% of MU’s DRAM volume and one-third of its NAND volume.
These new SCAs could provide more predictable demand and pricing while helping the company manage future memory cycles. Its rivals, such as SK hynix Inc. (SKHY - Free Report) and Sandisk Corp. (SNDK - Free Report) are pursuing strategies similar to MU by building stronger customer commitments.
Strong Estimate Revisions
Micron has an expected revenue and earnings growth rate of 91.5% and more than 100%, respectively, for the current year (ending August 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 0.01% over the last 30 days.
Image Source: Zacks Investment Research
Attractive Valuation
Micron has rallied nearly 242% year to date. However, the stock price is currently trading at a 22% discount from its 52-week high posted on June 25. As a result, the stock still looks very attractive.
MU trades at a forward 12-month price-to-earnings (P/E) multiple of 6.18X, which is significantly lower than the industry average of 21.37X and the S&P 500’s 18.03X. This discount adds to the appeal for long-term investors.
Huge Price Upside Potential
The current Zacks Consensus average price for Micron is based on short-term price targets offered by 42 analysts. The short-term average price target of brokerage firms represents an increase of 52.6% from the last closing price of $975.26.
The brokerage target price is currently in the range of $852-$2,000. This indicates a maximum upside of 105% and a maximum downside of 12.5%. The risk/reward ratio is highly favorable at 1:8.4.
Micron Technologies has invested heavily in next-generation memory technologies, positioning itself to meet the growing performance and efficiency requirements of AI ecosystems. At this stage, it will be prudent to buy MU on every dip. Hold this stock for the long term as the astonishing growth potential of the global AI-powered data centers and MU’s strong business visibility are likely to generate more value.
View the Zacks #1 Rank List
Image: Shutterstock
Micron Has More Firepower Left in Its Cylinder for the Long Term
Micron Technology Inc. (MU - Free Report) witnessed a meteoric rise in its stock price in the first half of 2026, rallying nearly 340%. However, the stock price has been witnessing softness in the past two and a half months. This has opened a tremendous opportunity for both short- and long-term investors.
MU is set to continue its blockbuster performance at least through 2027 on extremely tight supply of DRAM, soaring demand for high-bandwidth memory (HBM), new Strategic Customer Agreements (SCAs) to reduce earnings and cash flow volatility and effective strategic investment.
The chart below shows the price performance of MU year to date.
Image Source: Zacks Investment Research
Excellent Business Opportunity
Micron has been benefiting tremendously from the enormous application of artificial intelligence (AI) in day-to-day life, which has pushed up the demand for memory chips. The four major hyperscalers are likely to raise their AI capital expenditure budget to more than $1 trillion next year and further beyond 2027.
This has resulted in more AI semiconductor sales, implying the need for multiple AI memory chips to operate. Flash memory technologies like DRAM and NAND are used in AI chips, enabling them to perform optimally.
The demand for AI-enabled memory chips is also robust. In their last earnings reports, all four major hyperscalers highlighted a shortage of memory and storage chips, resulting in soaring prices of these products. This situation is set to persist in 2027 and can improve slowly but steadily only in 2028.
MU’s gross margin climbed to 84.9% in the third quarter of fiscal 2026 from 74.9% in the prior quarter and 39% in the year-ago period. This proves how the HBM shortage is helping high-end memory developers increase prices in a world of AI-powered data center boom.
New Tech Trends to Drive Prospects
The performance of any AI model depends on memory performance and capacity. MU’s HBM is a highly sought-after product for NVIDIA Corp. (NVDA - Free Report) , Advanced Micro Devices Inc. (AMD - Free Report) and Alphabet Inc. (GOOGL - Free Report) to name a few, for their AI-enabled chipsets.
Micron has meaningful exposure to AI, cloud data centers, industrial IoT and autonomous vehicles, all of which require increasingly advanced memory solutions. As AI adoption accelerates, demand for DRAM and NAND products continues to rise.
NVIDIA identified Micron as a key HBM supplier for its GeForce RTX 50 Blackwell GPUs, reinforcing its importance within the AI supply chain. Demand for HBM4 is also benefiting from next-generation AI infrastructure deployments, including NVIDIA’s Vera Rubin platform.
Long-Term SCA Deals
Micron has signed 16 SCAs covering customers across data centers, consumer markets and automotive. Most agreements run for five years through 2030, while automotive deals generally run for three years. Together, the contracts represent about 20% of MU’s DRAM volume and one-third of its NAND volume.
These new SCAs could provide more predictable demand and pricing while helping the company manage future memory cycles. Its rivals, such as SK hynix Inc. (SKHY - Free Report) and Sandisk Corp. (SNDK - Free Report) are pursuing strategies similar to MU by building stronger customer commitments.
Strong Estimate Revisions
Micron has an expected revenue and earnings growth rate of 91.5% and more than 100%, respectively, for the current year (ending August 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 0.01% over the last 30 days.
Image Source: Zacks Investment Research
Attractive Valuation
Micron has rallied nearly 242% year to date. However, the stock price is currently trading at a 22% discount from its 52-week high posted on June 25. As a result, the stock still looks very attractive.
MU trades at a forward 12-month price-to-earnings (P/E) multiple of 6.18X, which is significantly lower than the industry average of 21.37X and the S&P 500’s 18.03X. This discount adds to the appeal for long-term investors.
Huge Price Upside Potential
The current Zacks Consensus average price for Micron is based on short-term price targets offered by 42 analysts. The short-term average price target of brokerage firms represents an increase of 52.6% from the last closing price of $975.26.
The brokerage target price is currently in the range of $852-$2,000. This indicates a maximum upside of 105% and a maximum downside of 12.5%. The risk/reward ratio is highly favorable at 1:8.4.
Image Source: Zacks Investment Research
Northward Journey to Continue
Micron currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Micron Technologies has invested heavily in next-generation memory technologies, positioning itself to meet the growing performance and efficiency requirements of AI ecosystems. At this stage, it will be prudent to buy MU on every dip. Hold this stock for the long term as the astonishing growth potential of the global AI-powered data centers and MU’s strong business visibility are likely to generate more value.