Micron Technology, Inc.

NASDAQ Global Select
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Bullish +65

Here’s why Micron stock looks unusually cheap before its next earnings

AI-generated analysis

📉 MU trades at ~6.3x forward earnings versus ~19x for the S&P 500 despite expectations of a strong fiscal fourth-quarter.

💰 Goldman Sachs forecasts FY2024 Q4 revenue of $51.9 billion and EPS of $32.54, both above Wall Street estimates.

🧠 AI demand for HBM is extending the memory shortage cycle, with supply improvements expected only gradually through 2028.

📈 Susquehanna analyst Mehdi Hosseini states memory now accounts for 50% to 55% of semiconductor industry revenue.

🚀 Mizuho analyst Vijay Rakesh projects Micron's FY2027 revenue and EPS to increase approximately 66% and 80%, respectively.

⚠️ Key risk involves competitors adding DRAM/NAND capacity, particularly from China, which could break pricing power and force margins down.

📅 September 30 earnings serve as a critical test for the durability of current margins rather than just a beat-or-miss event.

🔮 Goldman Sachs expects Micron to guide to low-teens sequential revenue growth for fiscal first-quarter 2027.

Bullish Signals
  • Analysts expect another strong quarter with Goldman Sachs forecasting FY2024 Q4 revenue of $51.9 billion and EPS of $32.54, both above Wall Street expectations.
  • AI-driven demand for HBM is extending the memory shortage cycle, potentially sustaining exceptional margins into FY2027–2028.
  • Susquehanna analyst Mehdi Hosseini notes memory now represents 50% to 55% of semiconductor revenue, up from a historical range of 20% to 30%.
  • Mizuho analyst Vijay Rakesh expects Micron's FY2027 revenue and EPS to increase approximately 66% and 80%, respectively.
Risk Factors
  • Investors are skeptical about how long the current memory shortage and associated profitability can persist, leading to a low valuation multiple.
  • Goldman Sachs flags capacity growth from competitors, particularly in China, as a risk that could break pricing power and force margins down fast.
Full Analysis
Micron Technology (MU) stock is trading at approximately 6.3x forward earnings, significantly below the S&P 500's ~19x multiple, despite analysts expecting a strong fiscal fourth-quarter performance ahead of its September 30 results. This valuation discount reflects investor skepticism regarding the durability of current high margins and concerns that traditional cyclical supply dynamics might eventually erode pricing power. The bullish thesis centers on AI-driven demand for high-bandwidth memory (HBM) extending the shortage cycle beyond historical norms, potentially sustaining exceptional profitability into FY2027–2028. Goldman Sachs analyst James Schneider forecasts fiscal fourth-quarter revenue of $51.9 billion and earnings of $32.54 per share, both above Wall Street expectations, driven by tight DRAM and NAND supply supporting pricing. Analysts highlight that AI has structurally altered memory economics, with HBM consuming more wafer capacity than conventional DRAM and requiring significant time for industry supply to catch up. Susquehanna analyst Mehdi Hosseini notes memory now represents 50% to 55% of semiconductor revenue, while Mizuho expects Micron's FY2027 revenue and EPS to rise roughly 66% and 80%, respectively, suggesting earnings growth could justify the current low multiple.