Micron Technology Inc. (MU) has recently been one of the standout performers in my portfolio, thanks to a well-timed buy during the broader market dip in March. However, the bullish case isn’t without limits—Micron operates in the highly cyclical and volatile memory market. Despite approaching the company’s all-time high of $145, there are both reasons to be upbeat and downbeat regarding MU stock.
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I’ve recently halved my position, but I still see potential upside of 20–30% over the next 12 months. That said, I expect a reversal soon afterward, as the company’s financial growth is likely to slow sharply and eventually contract. All in all, I am Bullish in the near medium term and expect Micron to begin a downtrend in the latter half of next year.
Some Stocks are Trades, Not Investments
Given that Micron’s DRAM and NAND memory revenue cycles typically average about three or four years, and the current cycle started in late 2022, we can logically expect Micron to face its next downturn in late 2026. Due to current AI demand, the cycle could extend into late 2027, aligning with current consensus estimates. The market’s money will start positioning about 12 months before this, so rationally, it’s best to sell Micron stock completely by the middle of 2026; otherwise, you face a stark downside risk.
Micron is benefiting from strong demand for HBM (high-bandwidth memory), which is enhancing its average selling prices and boosting margins. According to TipRanks data, MU’s gross margins are now nearly 40%, compared to 22% in Fiscal 2024 and -9.11% in Fiscal 2023. Therefore, it’s safe to say we are firmly in the limelight of positive market sentiment for this current memory cycle with Micron stock.
Given this outlook, if you’re joining the Micron bull run now, you need to have great discipline and restraint.
I’ve personally set a take-profit target at $145, giving me the confidence to secure gains early, potentially before others start selling into a decline. Market sentiment can shift quickly, and short-term trades demand close attention. Having a clear take-profit target helps reduce the pressure and brings discipline to the trading strategy.
Micron’s Financial Trajectory Points North
Current consensus estimates project Micron’s year-over-year revenue growth at approximately 45% for Fiscal 2025 and 28% in Fiscal 2026. I think we can be a bit more bullish for next year—30% year-over-year revenue growth seems reasonable, as does 55-60% normalized earnings growth. This is remarkable, and it does spell substantial upside to come.
The company’s current P/E (price-to-earnings) ratio is 19.3 compared to a sector median of 24, which appears relatively cheap. However, I don’t like to compare individual stocks to the sector alone, because the market typically prices market-leading stocks uniquely for a plethora of different group-psychology reasons.
Meanwhile, Micron’s five-year average P/E non-GAAP ratio is 16.2; however, we should expect it to be higher now, given the company’s current massive growth. Consider year-over-year revenue growth of 10.3% as a five-year average compared to 58.2% in the last 12 months.
However, due to moderating growth in Fiscal 2026, we shouldn’t expect a valuation multiple expansion phase, but instead contraction. I think a P/E non-GAAP ratio of 15 is bullish, and if the company delivers $13.50 in normalized earnings per share for Fiscal 2026 as I predict, the stock price will be $200. This represents the upper limit for the bull case over the next 12 months, indicating a potential 67% upside.
Given its recent performance, especially against broader benchmarks like the S&P 500 (SPX), MU stock is carrying momentum into the second half of 2025, but there is a cooldown expected.
In my view, market sentiment is likely to start cooling sooner than expected due to herd behavior. A sharp slowdown in earnings growth—from 50% year-over-year to just 15% between 2026 and 2027—marks a significant shift. And by 2028, the full impact of that contraction will likely be priced in.
With that in mind, I’d rather err on the side of caution. I plan to reduce my position to 25% of the original stake and may hold the remainder for a potential move to $160–$170. That said, there’s a strong chance I’ll exit entirely at $145 and reallocate the capital into higher-alpha, undervalued opportunities. Ultimately, strong returns hinge on smart asset allocation and rotation.
Is MU a Good Stock to Buy?
On Wall Street, Micron stock has a consensus Strong Buy rating based on 23 Buys, two Holds, and zero Sells over the past three months. MU’s average MU price target of $154 indicates ~26% upside over the next 12 months.
The high estimate aligns with my bull-case outlook of $200, but as I mentioned, market psychology and cyclical timing are everything with this investment.
Risk-on stocks, such as MU, can give you a false sense of confidence and then take it all away. That’s why you need an exit strategy (preferably a multifaceted one) and a diversified portfolio to mitigate any single-stock risks.
Volatility Rich Micron Requires Investor Discipline
When a stock like Micron is delivering strong returns, it’s easy to feel tempted to jump in. But doing so without a clear short-term strategy can be risky. Buying Micron now may be late in the cycle, but that doesn’t mean the bullish case is over—it just means this is more of a short-term trade than a long-term hold.
The key is to approach it with discipline. As long as you set your take-profit target in advance and stick to it, there’s still solid potential to capture meaningful gains in a relatively short period.