How Micron Stock Can Rally

Core Insights - Micron Technology has a strong historical performance, with stock increases of over 50% in less than two months during significant years like 2013 and 2020, and multiple instances of over 30% increases in similar timeframes, indicating potential for future growth [2] - The stock's recent surge is attributed to high demand for high-bandwidth memory (HBM) essential for AI advancements, with full bookings for 2025 HBM production and optimistic revenue projections for fiscal 2026 [3] Financial Performance - Micron exhibits robust financial health, with a revenue growth of 48.9% over the last twelve months and a three-year average growth of 20.3%, alongside a free cash flow margin of nearly 4.5% and an operating margin of 26.2% [12] - The stock is currently trading at a price-to-earnings (P/E) multiple of 22.0, reflecting its valuation in the market [12] Market Dynamics - The demand for DRAM and NAND memory is expected to rise significantly through 2026, with some DRAM prices increasing by 20-70% since September 2025 due to limited supply and strong demand from AI and data centers [12] - Micron's strategic investments, including $9.6 billion in Japan and $7 billion in Singapore for HBM production, are set to enhance its capacity and position in the AI market by 2028 [12]