Micron’s stock has gained a whopping 215.97% year to date. The company’s earnings report for fiscal Q1 2026, released on December 17, helped alleviate the gloomy atmosphere created by Nvidia and Broadcom, which both faced a decline in stock value despite posting very strong earnings reports.
Micron’s report and the guidance the company provided for Q2 turned out to be very strong, and the stock market reacted positively. Micron closed 10.2% higher at $248.55 the day following the earnings release.
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Revenue of $13.64 billion compared to $8.71 billion for the same period last year
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GAAP net income of $5.24 billion, or $4.60 per diluted share
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Non-GAAP net income of $5.48 billion, or $4.78 per diluted share
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Operating cash flow of $8.41 billion compared to $3.24 billion for the same period last year
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Revenue of $18.70 billion ± $400 million
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Gross margin of 67.0% ± 1.0%
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Operating expenses of $1.56 billion ± $20 million
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Diluted EPS of $8.19 ± $0.20
Bank of America analyst Vivek Arya and his team provided an opinion on the MU stock following the earnings release.
The team raised its estimates for Micron’s (MU) pro forma EPS for fiscal years 2026, 2027, and 2028 by 62%, 80%, and 42%, to $31.84, $38.85, and $29.15, respectively.
Analysts noted that key risks for Micron stock include volatility of AI demand, pricing of traditional memory, incremental industry supply, and the chance that the current 68% gross margin and 60% operating profit margin are close to peak levels.
Arya stated that while there may be some volatility in AI demand, HBM is sold out again throughout the calendar year 2026, and customers are engaged in multi-year agreements, which should enable Micron to have a potentially more sustainable upcycle compared to prior cycles.
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Larger-than-expected memory average selling price decline
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Greater competition from China newcomers
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Share loss to large competitors
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Softening of demand across major end markets such as data center,
smartphones, or PCs
In a research note shared with TheStreet, Arya upgraded MU stock rating from neutral to buy, and raised the target price from $250 to $300, based on a 2.3 multiple of his estimate for Micron’s price-to-book ratio for calendar year 2027, which is in the middle/upper range of Micron’s long-term range of 0.8x to 3.1x. Arya added that the price target is based on the assumption that we are potentially in a memory upcycle.
