Should You Pay Attention To Micron Technology Stock’s Momentum?
Should You Pay Attention To Micron Technology Stock’s Momentum?
Publish Date: 2026-05-30 01:25:00
Source Domain: www.trefis.com
Micron Technology (MU) stock is at an interesting point right now. It has strong momentum, and if you bet on it, you are betting on a company with strong margin, good cash flow, low-debt capital structure, and good tailwinds. But is that enough?
Why Bet On MU Now?
The core long thesis is that an unprecedented, AI-driven demand surge for High-Bandwidth Memory (HBM) is consuming a disproportionate amount of industry capacity. This creates a severe, industry-wide supply shortage for all memory types, granting Micron extreme pricing power and driving gross margins to historically unseen levels, leading to a fundamental re-rating of its earnings power.
- Micron’s entire HBM supply is sold out for calendar 2026, providing high near-term revenue visibility.
- DRAM ASPs rose ~65% and NAND ASPs rose ~75% sequentially in Q2 FY2026, demonstrating extreme pricing power.
- Company-level non-GAAP gross margin reached 75% in Q2 FY2026 and is guided to accelerate to ~81% in Q3.
- Forward guidance for Q3 FY2026 revenue is $33.5B, signaling continued, powerful momentum in the cycle.
Before making any decision, it helps to understand if the above factors align with what has been driving MU stock so far, or has the market view changed?
How Do The Fundamentals Look?
- Long-Term Profitability: About 36.8% operating cash flow margin and 15.6% operating margin for the last 3-year average.
- Strong Momentum: Currently in the top 10th percentile of stocks in terms of “trend strength” – our proprietary momentum metric.
- Revenue Growth: Micron Technology saw revenue growth of 85.5% LTM and 45.3% last 3-year average, but this is not a growth story
Below is a quick comparison of MU fundamentals with S&P medians.
| MU | S&P Median | |
|---|---|---|
| Sector | Information Technology | – |
| Industry | Semiconductors | – |
| PS Ratio | 18.8 | 3.2 |
| PE Ratio | 45.3 | 23.7 |
| LTM* Revenue Growth | 85.5% | 7.4% |
| 3Y Average Annual Revenue Growth | 45.3% | 5.7% |
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