Micron Technology announces record-breaking sales figures

This computer storage chip manufacturer has achieved rapid sales growth in all its major business segments. DRAM sales drove this growth, with quarterly sales reaching $39.8 billion. Micron's gross margin rose to 87%, and its quarterly net profit soared to $38.4 billion. For the fiscal year 2026, total revenue reached an astonishing $133 billion.

Micron's management expects revenue in the first fiscal quarter to exceed $61.5 billion, with operating costs of $2 billion. The forward price-earnings ratio for MU stock is 7 times, which is significantly lower than the S&P 500 index's valuation of 19.1 times.

The fluctuations in chip demand explain why investors remain cautious.

The historic fluctuations in demand for computer chips explain why investors remain cautious. Periods of high demand often give way to oversupply and falling prices, as seen in 2023 when Micron's annual sales plummeted from $30.7 billion to $15.4 billion.

To prevent significant fluctuations in the stock price of MU, Micron has signed multi-year contracts with price limits set at both a minimum and a maximum. Management stated, "These multi-year pay-as-you-go agreements strengthen our long-term supply planning and enhance the durability and predictability of our strong financial performance."

Wall Street analysts still expect Micron's stock price to rise significantly. Five-star analyst Gil Luria has raised his target price to $3,000, while five-star analyst Quinn Bolton has set a target price of $1,650.

How chip demand affects Micron's stock price

To achieve these target prices, Micron's market value would reach $2.3 trillion, on par with industry peers such as chip giant NVIDIA ( NVDA ) and cloud computing giant Microsoft ( MSFT ).

Conversely, if technology companies reduce their chip purchases, or if chip supply grows too rapidly, falling memory prices could erode Micron's profit margins and cause the MU stock price to remain at a lower level.

Should one buy, sell, or hold Micron stocks?

Returning to Wall Street, analysts have given Micron a consensus rating of "strong buy," with a total of 27 buy ratings and 1 hold rating over the past three months. Based on this, the average target price for MU stock is $1621.67, which indicates that there is still 57.6% potential for upside for the stock. (See MU stock forecast)

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