1 hour ago
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Omor Ibne Ehsan
Tue, May 26, 2026 astatine 12:14 PM CDT 5 min read
Quick Read
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Micron (MU) reported fiscal Q2 2026 gross of $23.9B, up 196% year-over-year, with Q3 guidance for $33.5B gross and 81% gross margin, portion trading astatine conscionable 7x guardant FY 2027 net compared to NVIDIA and Broadcom astatine 24x contempt supplying the HBM representation captious to AI infrastructure. The institution achieved $6.9B successful escaped currency travel past quarter, approved a 30% dividend increase, and has begun HBM4 measurement shipments with multi-year lawsuit contracts replacing the aged one-year model.
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Micron’s AI representation dominance is protected by structural constraints: HBM spot manufacturing requires years of cleanroom build-out and construction, customers tin lone person 50-66% of their request successful the mean term, and supply-demand stays choky done 2026, creating a supply-constrained situation dissimilar the 2018 representation downcycle.
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Consider Micron Technology (NASDAQ:MU) present due to the fact that a guardant FY 2027 net aggregate of 7x connected a institution sitting astatine the literal halfway of the AI representation bottleneck is simply a valuation that astir ne'er exists astatine the bosom of a megatrend, and the lone crushed it does present is that your advisor inactive thinks "memory" means 2018.
The numbers bash the arguing. Micron conscionable reported fiscal Q2 2026 gross of $23.9 billion, up 196% year-over-year, with non-GAAP EPS of $12.20 and gross margins of 75%. Guidance for Q3 calls for $33.5 cardinal successful revenue, EPS of $19.15, and gross borderline adjacent 81%. Against a stock terms of $884 arsenic of this writing, the marketplace is inactive pricing this similar a commodity DRAM store heading into a downcycle. It is doing the opposite.
By the clip you work this, Micron whitethorn person adjacent crossed $1,000. The rally is accelerating owed to investors identifying however discounted the banal is compared to its earnings. And each clip the rally accelerates, the FOMO volition nonstop it adjacent higher.
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The Valuation Disconnect
NVIDIA trades northbound of 24x guardant net for FY 2027 (ends successful January 2027). Broadcom (NASDAQ:AVGO) , astir the same. Micron, the institution supplying the HBM that makes those GPUs functional, trades astatine a guardant aggregate of 7x. CEO Sanjay Mehrotra noted connected the Q2 telephone that "AI request is driving DRAM and NAND information halfway bits TAM to transcend 50% of the manufacture TAM for the archetypal clip successful calendar 2026." The premix is shifting permanently, and the aggregate has not caught up.
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