Micron Technology (MU) has experienced a remarkable stock price surge over the past few months. Much like other tech-focused AI stocks, MU is benefiting from a resurgence of market sentiment and investor confidence. Since reaching its low in April 2025, the stock has doubled, driven by a powerful combination of investor optimism and strong fundamental catalysts.
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These include soaring demand for high-bandwidth memory (HBM) fueled by artificial intelligence, a recovery in the broader memory market, and the company’s ambitious $200 billion investment in U.S. manufacturing.
After such a sharp rally, it’s fair to question whether the stock has run too far, too fast. However, I believe the underlying drivers have long-term staying power, and the valuation still appears reasonable. Here’s why I remain Bullish on Micron.
Catalysts Fueling Micron’s Meteoric Rise
The semiconductor industry’s been on a tear, and Micron’s riding the crest of the wave. The most significant driver is AI, which demands high-performance memory like Micron’s HBM for data centers and AI accelerators. Micron, for instance, is now shipping 36GB HBM4 samples to Nvidia (NVDA), which appears to be offering a 60% performance boost over previous generations, a significant advancement for AI workloads.
Beyond AI, the memory market is rebounding from its slump in 2022-2023, with DRAM prices surging this year. The chip giant is also capitalizing on government incentives for domestic chip production, investing $150 billion in U.S. fabrication and $50 billion in R&D. Beyond servicing the growing demand, this expansion should enable Micron to capture market share in a world hungry for faster, smarter chips.
In the meantime, Micron is quietly strengthening its position by teaming up with AMD (AMD) and others to enhance its high-bandwidth memory (HBM) capabilities. Its push into next-generation memory technology (such as DDR5 and NAND flash) also positions it well in fast-growing areas like automotive and industrial. With its HBM capacity already spoken for through 2025, demand is clearly running hot. And this time, it’s not just another PC or smartphone cycle. AI appears to be a lasting, multi-year tailwind.
Q3 2025 Results: The AI Boom in Action
Micron’s fiscal Q3 results, published just last week, were a masterclass in capitalizing on these trends. Revenue hit $9.3 billion, up 36.6% YoY, beating analyst estimates of $8.86 billion. Adjusted EPS soared 208% to $1.91, crushing estimates of $1.60.
The star of the show was MU’s data center segment, where AI-driven HBM demand and record DRAM revenues took center stage. Micron’s CEO, Sanjay Mehrotra, called their new HBM4 chip “the most complex memory product ever made,” signaling confidence in tackling larger AI models.
Margins are recovering too, despite a slight dip to 36.5% from 37.9% in Q2, thanks to a favorable product mix and pricing power, as shown by TipRanks data.
The company’s guidance for Q4 2025, which projects $10.71 billion in revenue and $2.49 EPS, shows the momentum isn’t slowing. Clearly, these numbers demonstrate operational leverage, as Micron benefits from higher volumes and improved pricing. The only near-term challenge is the capital expenditure associated with Micron’s large-scale fab investments. However, these are strategic, long-term commitments aimed at securing a leading position in the global memory market.
Is Micron Stock Undervalued?
Now, let’s talk valuation. At roughly $120 per share, Micron trades at about 15x this year’s expected EPS of roughly $7.82. Of course, for a semiconductor stock near the top of the cycle, the valuation might seem steep by historical standards. Chipmakers like Micron have long been known for their cyclical nature—surging during periods of strong demand and sharply pulling back when the cycle turns.
But this cycle feels different. AI’s not a fad. It’s reshaping computing, and Micron’s HBM is at the heart of it. Analysts project EPS growth of 502% this fiscal year and 54% next year to $12.05. That drops the forward P/E to a dirt-cheap 10, compared to the semiconductor industry’s average of 24x, especially considering that EPS growth should remain strong in the following years too. Analysts already project EPS growth to continue at least through fiscal 2028, and these estimates may be revised higher over time.
What is the Target Price for MU Stock?
The majority of analysts covering Micron maintain a very favorable price outlook, even after its monster rally. Generally, stocks that have appreciated strongly in a short period tend to suffer from intraday profit-taking, but not MU. Currently, MU stock holds a Strong Buy consensus rating, based on 21 Buy and two Hold ratings issued over the past three months, with no analysts recommending a Sell.
Furthermore, MU’s average 12-month stock price target is $156.26, suggesting a significant upside of ~28% from current levels. Therefore, Wall Street may indeed view today’s catalysts as a strong long-term tailwind for the company’s revenue and earnings growth prospects.
Conclusion
Micron Technology’s stock has surged, doubling from its April lows—driven by accelerating demand for AI-related high-bandwidth memory (HBM), a recovering memory market, and substantial investments in U.S. manufacturing. Its latest Q3 results reinforce that Micron isn’t merely benefiting from the AI boom—it’s playing an active role in powering it.
Despite the rally, the stock remains attractively valued, trading at just 15x this year’s projected earnings. With strong, multi-year growth drivers in place, that multiple could quickly compress into single digits as earnings ramp up. If AI continues to redefine the technology landscape, Micron has the potential to be a foundational long-term holding in a forward-looking portfolio.