Artificial intelligence (AI) is reshaping the tech landscape at breakneck speed, and investors are scrambling to lock in the biggest winners. However, even in the crowded artificial intelligence industry, few companies have been as successful as Micron Technology (MU). MU stock has delivered huge returns over the past year as the memory chip giant hit all-time highs amid the artificial intelligence wave. Artificial intelligence hyperscale companies are competing to build massive data center capacity, and the demand for memory chips has surged, which is the main engine for Micron Technology’s remarkable rise.
But every rally eventually encounters a reality check. Micron’s momentum has slowed recently following reports earlier this week that Samsung Electronics’ next-generation HBM4 chip is close to receiving certification from Nvidia (NVDA). High-bandwidth memory (HBM) is a specialized chip designed to transfer large amounts of data at ultra-fast speeds and is a key component within artificial intelligence accelerators.
Nvidia’s AI processors rely heavily on HBM, making supplier approvals a closely watched development on Wall Street. Now, with Samsung reportedly preparing to begin mass production of next-generation HBM chips earlier than expected, the competitive dynamics in the AI memory space could change quickly.
The South Korean tech giant’s progress could put significant pressure on Micron Technology, a major supplier of advanced memory products used in data centers and artificial intelligence infrastructure. In light of this latest development, should you buy, sell or hold MU stock? Let’s take a closer look.
Micron Technology, headquartered in Boise, Idaho, is at the center of the global memory market, providing chips that quietly power today’s data-driven world. The company designs and manufactures a broad portfolio of DRAM, NAND and NOR memory products for applications ranging from cloud data centers to smartphones and connected devices.
Micron’s emphasis on engineering expertise and manufacturing scale plays a key role in supporting artificial intelligence workloads and other compute-intensive applications. From large data centers to edge devices and mobile platforms, its memory and storage solutions form the backbone of systems that process, store and move vast amounts of information every day. Micron Technology, with a market capitalization of approximately $465 billion, has grown into a semiconductor heavyweight.
The company’s stock price fell about 2.8% on February 9 after Samsung-related news broke, but the pullback did little to diminish its extraordinary performance. The stock has soared an eye-popping 336% over the past year, leaving the S&P 500 ($SPX), which has gained just 12% over the same period, far behind. After hitting an all-time high of $455.50 last month, Micron Technology’s shares are now only about 9% below that peak, underscoring how powerful its AI-driven rally has been.
Despite Micron Technology’s impressive run, its valuation is still far from overvalued. MU stock trades at a forward P/E ratio of approximately 12.6 times, a significant discount to the industry median of 23.6 times. For a company driving the artificial intelligence memory boom, the gap shows that even after extraordinary growth, investors are still paying a relatively modest price for its growth trajectory.
Micron kicked off fiscal 2026 with strong quarterly results. In its earnings report on December 17, the company’s revenue and profit exceeded expectations, with revenue reaching $13.6 billion, a year-on-year increase of 57%, well above the market consensus of $12.7 billion. The results marked Micron Technology’s third consecutive quarter of record revenue, driven by a 69% surge in DRAM sales and a 22% increase in NAND revenue.
DRAM alone generated sales of $10.8 billion, accounting for 79% of total sales, while NAND contributed $2.7 billion, accounting for 20%. It is worth noting that the company’s total revenue, DRAM and NAND revenue, HBM and data center revenue, and revenue from each business unit all set new records. Cloud memory sales climbed to $5.28 billion, doubling year-over-year, while core data center revenue increased 4% year-over-year to $2.38 billion.
The company said results in both major divisions were driven by higher pricing. Profitability followed a similar growth trajectory. Adjusted gross profit margin was 56.8%, higher than 39.5% in the same period last year. Looking at earnings, adjusted earnings per share soared 167% year-on-year to $4.78, far exceeding Wall Street expectations of $3.78.
Looking ahead, Micron is optimistic about the second quarter of fiscal 2026, predicting revenue of approximately $18.7 billion and adjusted earnings per share of $8.42. Management expects continued strong AI-driven demand in data centers and edge computing despite supply constraints likely to persist into 2026, a backdrop that could further bolster pricing strength.
Despite increased competition, Wall Street’s confidence in Micron Technology remains firm. MU stock has a consensus “Strong Buy” rating, with 33 out of 42 analysts calling it a “Strong Buy,” six analysts giving it a “Moderate Buy” rating and only three analysts recommending a “Hold” rating.
Even after the strong run, optimism hasn’t faded. While MU’s average price target has topped $345.97, the market-high target of $500 implies room for roughly 21% upside ahead. That’s a sign that many analysts believe the AI-driven momentum is far from over.
On the date of publication, Anushka Mukherji did not hold (either directly or indirectly) any securities mentioned in this article. All information and data in this article are for reference only. This article was originally published on Barchart.com