Micron Rallies 315% in a Year: Is the Stock Still Worth Buying?

Core Insights - Micron Technology, Inc. (MU) has achieved a remarkable 314.8% gain over the past 12 months, significantly outperforming the broader Zacks Computer and Technology sector, which rose 20.6% in the same period [1][8]. Company Performance - The company has benefited greatly from the artificial intelligence (AI) boom, leading to strong demand for its memory chips, with other semiconductor companies like Intel, Amphenol, and AMD also experiencing substantial stock price increases [2]. - Micron's first-quarter results for fiscal 2026 showed revenues of $13.64 billion, a 57% year-over-year increase, and non-GAAP earnings per share (EPS) of $4.78, reflecting a 167% rise [10][11]. - The non-GAAP gross margin improved to 56.8% from 39.5% year-over-year, and non-GAAP operating income rose to $6.42 billion from $2.39 billion, indicating strong revenue growth conversion into profits [12]. Industry Trends - Micron Technology is well-positioned to capitalize on the ongoing demand for memory solutions in AI and high-performance computing (HPC), with a focus on advanced memory solutions like DRAM and NAND [3][4]. - The company's diversification strategy has shifted focus from the volatile consumer electronics market to more stable sectors such as automotive and enterprise IT, enhancing its revenue stability [5]. - The demand for high-bandwidth memory (HBM) is on the rise, with Micron's HBM3E products gaining traction due to their energy efficiency and bandwidth suitable for AI workloads [6]. Future Outlook - Analysts project continued growth momentum for Micron, with the Zacks Consensus Estimate for fiscal 2026 revenues and EPS indicating year-over-year growth of 96.1% and 296.9%, respectively [13]. - Micron's forward 12-month price-to-earnings (P/E) ratio is 10.24, significantly lower than the sector average of 25.06, making it an attractive option for long-term investors [14][17]. - The company is recognized as a core HBM supplier for NVIDIA's GeForce RTX 50 GPUs, highlighting its integral role in the AI supply chain [9]. Investment Recommendation - Given its strong fundamentals, established position in the AI-driven memory market, and attractive valuation relative to peers, accumulating MU stock is recommended [18][19].