Is Micron Turning Into a Steadier Growth Stock?
Yahoo Finance ·
Micron Technology ( MU 5.68% ) stock has rocketed more than 755% in the past year. Memory chips are now one of the biggest, if not the biggest, bottlenecks in the artificial intelligence (AI) build-out. This has boosted memory prices and sent Micron's earnings soaring. The stock's forward earnings multiple of 14 is expensive relative to Micron's historical trading range, where it usually trades at under 10 times forward earnings. But this higher valuation could still be attractive if the company can avoid past boom-and-bust cycles and deliver more sustainable growth. Management has a promising strategy to solve it. Micron's latest results for the fiscal 2026 third quarter underscore just how strategically important memory has become. Revenue climbed 346% year over year, reaching $41 billion, while earnings per share more than doubled to $24.67. Management expects revenue to reach $50 billion in the current quarter. Gross margin guidance also points to a slight increase to roughly 86%, as memory demand continues to outpace supply. Every AI system is powered by graphics processing units (GPUs), central processing units (CPUs), and application-specific integrated circuits (ASICs), and these chips all rely on high-performance memory in their architectures. As a result, Micron now expects tight supply conditions to persist beyond calendar 2027.
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