Micron (MU) Is Riding the AI Boom, but the Stock Still Trades at a Discount

2 weeks ago 20

TipRanks

Sat, April 18, 2026 astatine 9:16 AM CDT 7 min read

Micron Technology (MU) is successful its strongest upcycle yet, fueled by surging spending connected artificial quality (AI) infrastructure, which has turned representation into a captious bottleneck. Fiscal Q2 results validate that the semiconductor institution delivered the largest sequential gross summation successful its history, and the concern continues to accelerate. Yet astatine astir 7x guardant earnings, Wall Street has not afloat priced successful Micron’s net power. I stay long‑term bullish connected MU, arsenic the spread betwixt its crisp net momentum and still‑modest valuation remains excessively wide to ignore.

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Micron’s Fiscal Q2 results showed full gross of $23.9 billion, up astir 75% sequentially and 196% year-over-year, marking the 4th consecutive quarterly grounds and the largest sequential dollar summation successful the company’s history. In fact, Micron’s Q2 gross unsocial exceeded the company’s full Fiscal 2022 gross of $15.5 billion.

Dynamic random-access representation (DRAM) gross deed $18.8 billion, up 207% year-over-year, driven by choky proviso and a favorable merchandise mix. NAND gross reached $5.0 billion, up 169% year-over-year, with information halfway NAND much than doubling sequentially. Gross borderline reached 75%, operating borderline 69%, non-GAAP net per stock (EPS) $12.20, and escaped currency travel astatine a grounds $6.9 billion.

Micron reduced indebtedness implicit the archetypal fractional of Fiscal 2026, bringing its nett currency presumption to $6.5 billion, the highest successful the company’s history. That balance‑sheet spot gives Micron the fiscal flexibility to money its next‑generation representation roadmap without relying heavy connected outer financing.

Q3 outlook highlighted by Micron’s absorption is arsenic striking. The spot institution is targeting $33.5 cardinal successful revenue, a gross borderline of astir 81%, and non-GAAP EPS of $19.15. Meanwhile, the projected borderline enlargement from 75% successful Q2 to 81% successful Q3 is peculiarly notable, arsenic it suggests pricing powerfulness is inactive strengthening alternatively than plateauing. These targets awesome that absorption views the existent request situation arsenic durable alternatively than episodic.

As we analyse Micron’s competitory strengths, High Bandwidth Memory (HBM) stands retired arsenic a captious portion of the thesis. HBM is simply a stacked DRAM architecture purpose-built for AI accelerators, delivering information transportation speeds that accepted representation cannot match. In Fiscal 2025, HBM emerged arsenic a meaningful contributor to Micron’s revenue, with Q4 HBM income reaching astir $2 billion. S&P Global (SPGI) Ratings expects that stock to turn importantly arsenic AI infrastructure spending accelerates.

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