Micron Technology (NASDAQ: MU) rallied some 15% today after reporting top- and bottom-line growth for its fiscal Q1 that Morgan Stanley dubbed the “best in the history of the US semis industry” outside of Nvidia.
For the current quarter, the memory-chip maker forecast adjusted earnings of $8.42 per share on $18.7 billion in revenue, well above Wall Street expectations of $4.78 per share and $14.2 billion in sales.
Following the post-earnings surge, Micron stock is trading a remarkable 300% higher than its year-to-date low.
Does Q1 report warrant buying Micron stock?
While Micron has historically been a volatile name, the AI-driven demand for its memory chips is broadly expected to change the dynamic.
On the earnings call, the company confirmed “we have a significant amount of unmet demand,” in fact, “we’re more than sold out,” added Sumit Sadana, its business chief.
According to MU, the total addressable market (TAM) for high-bandwidth memory will grow at a compound annualised rate (CAGR) of a whopping 40% and hit $100 billion within the next three years.
Taken together, these bold estimates suggest MU shares are still trading at a discount, with massive further upside expected next year.
A 0.18% dividend yield, along with a stock buyback programme, makes up for an additional reason to have Micron Technology in your investment portfolio heading into 2026.
MU shares are still trading at an attractive valuation
Micron shares have been in an exceptional uptrend this year, and yet they remain relatively cheaper to own than most of their AI peers.
At the time of writing, the Nasdaq-listed firm is trading at a forward price-to-earnings (P/E) ratio of about 12, much lower than the north of 40 for the likes of Nvidia.
Even from a technical perspective, the overall picture looks just as attractive for MU.
Despite an explosive surge in 2025, its 100-day relative strength index (RSI) currently sits at about 59 – indicating the bullish momentum is not near exhaustion just yet.
According to Barchart, options traders are also pricing in a move to north of $300 in this AI stock in the first quarter of 2026.
Should you own Micron heading into 2026?
Morgan Stanley experts are confident that artificial intelligence tailwinds will drive MU stock even higher from current levels in 2026.
“Next 12 months are going to have broader coat tails to the AI trade than just the processor names, and memory would be the biggest beneficiary.”
In short, Micron’s latest results underscore how dramatically the AI cycle has reshaped the memory market, positioning the company as one of the sector’s most compelling growth stories heading into 2026.
If demand trends hold and supply remains tight, analysts say the stock could continue to defy its historical volatility and reward investors willing to ride the next leg of the AI boom.
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