Micron Technology has more than tripled this year, yet the stock looks cheaper than much of the US market compared with the broader market today.
Shares have gained 224% in 2026, but Micron trades at roughly 6.3 times forward earnings ahead of its September 30 fiscal fourth-quarter results. The S&P 500 trades at 19 times forward earnings.
That discount reflects a concern, as memory booms have historically ended when high prices encouraged new capacity and supply caught demand.
The question now is whether AI has changed that cycle enough to make Micron’s profit surge last longer.
Micron’s six-times multiple assumes profits will fade
The valuation looks unusually low given what analysts expect from the coming quarter.
Goldman Sachs analyst James Schneider expects another strong quarter, as tight DRAM and NAND supply supports pricing.
He forecasts fiscal fourth-quarter revenue of $51.9 billion and earnings of $32.54 a share, both above Wall Street expectations.
Yet Goldman keeps a Neutral rating and a $1,100 price target.
That caution helps explain Micron’s multiple, as investors can accept that earnings remain exceptional while worrying that future supply additions weaken prices and margins.
Goldman has flagged capacity growth from competitors, particularly in China.
Micron is not trading cheaply because the market doubts the memory shortage.
It is trading cheaply because investors are sceptical about how long the shortage, and the profitability attached to it, can persist.
AI may be stretching the memory cycle
The bullish case is that this cycle may not behave like previous ones.
Susquehanna analyst Mehdi Hosseini told MarketWatch that memory has become the “king” of the semiconductor industry and said its “reign is here to stay.”
Memory now represents about 50% to 55% of semiconductor-industry revenue, versus a historical range of roughly 20% to 30%, according to Hosseini.
He expects DRAM prices to rise about 50% sequentially this quarter and NAND prices around 60%, followed by further increases.
AI is changing both demand and supply economics.
High-bandwidth memory used in AI accelerators consumes more wafer capacity than conventional DRAM.
Micron has said HBM carries roughly a three-to-one trade ratio with DDR5, while newer HBM generations require even more capacity.
The company has warned that industry supply will take considerable time to catch demand, with improvement expected only gradually in 2028.
If that persists, investors may be applying an old cyclical valuation framework to a memory market whose economics have structurally changed.
September 30 will test the discount
Mizuho analyst Vijay Rakesh has argued that “agentic AI is driving memory demand higher,” according to Investing.com.
He expects Micron’s fiscal 2027 revenue and earnings per share to increase about 66% and 80%.
That is the core bull case behind the low valuation: earnings could keep rising fast enough that even a stock up more than 200% remains inexpensive on future profits.
September 30 matters less as a beat-or-miss event than as a test of durability.
Investors will be watching DRAM and NAND pricing, HBM customer commitments, gross margins and any indication that supply tightness can extend through 2027 and into 2028.
Goldman expects Micron to guide to low-teens sequential revenue growth for fiscal first-quarter 2027, putting forward guidance at the centre of the valuation debate.
Micron’s six-times multiple does not mean Wall Street has missed the AI boom, but shows investors doubt today’s margins can last.
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