Micron Technology, Inc. (MU) | Investment Case

1. Company Snapshot

1.a. Company Description

Micron Technology, Inc.designs, manufactures, and sells memory and storage products worldwide.The company operates through four segments: Compute and Networking Business Unit, Mobile Business Unit, Storage Business Unit, and Embedded Business Unit.

It provides memory and storage technologies comprises DRAM products, which are dynamic random access memory semiconductor devices with low latency that provide high-speed data retrieval; NAND products that are non-volatile and re-writeable semiconductor storage devices; and NOR memory products, which are non-volatile re-writable semiconductor memory devices that provide fast read speeds under the Micron and Crucial brands, as well as through private labels.The company offers memory products for the cloud server, enterprise, client, graphics, and networking markets, as well as for smartphone and other mobile-device markets; SSDs and component-level solutions for the enterprise and cloud, client, and consumer storage markets; other discrete storage products in component and wafers; and memory and storage products for the automotive, industrial, and consumer markets.It markets its products through its direct sales force, independent sales representatives, distributors, and retailers; and web-based customer direct sales channel, as well as through channel and distribution partners.

Micron Technology, Inc.was founded in 1978 and is headquartered in Boise, Idaho.

Show Full description

1.b. Last Insights on MU

Breaking News: Micron Technology Inc has seen several changes in its shareholder base recently. Meridian Wealth Management LLC increased its stake by 64.7% to 4161 shares. Meanwhile, Machina Capital S.A.S. decreased its holdings by 21.3% to 24536 shares. New investors include Optimize Financial Inc with a $1.76 million stake and Marco Investment Management LLC with a $221,000 stake. Strengthening Families and Communities LLC reduced its stake by 83.1%. There is no recent earnings release available. Analysts at various firms have not recently updated their ratings.

1.c. Company Highlights

Last Price	394.69
Change Percentage	3.08%
Open	377.96
Previous Close	382.89
Market Cap ( Millions)	444227
Volume	36957411
Year High	455.5
Year Low	61.54
M A 50	310.36
M A 200	183.03

FCF Yield	2.68%
Dividend Yield	0.12%
ROE	22.43%
Debt / Equity	21.24%
Net Debt / EBIDTA	16.40%
Price To Book	7.55
Price Earnings Ratio	37.28
Price To FCF	37.29
Price To sales	10.5
EV / EBITDA	19.96

2. Micron Technology's Q1 FY2026 Earnings: A Record-Breaking Performance

Micron Technology, Inc. reported a stellar start to fiscal 2026, with Q1 revenue reaching $13.6 billion, a 21% sequential increase and a 57% year-over-year surge. The company's DRAM revenue stood at $10.8 billion, up 69% year over year, while NAND revenue was $2.7 billion, a 22% year-over-year increase. The consolidated gross margin for the quarter was 56.8%, an 11-percentage-point sequential improvement. Non-GAAP diluted earnings per share (EPS) came in at $4.78, exceeding estimates of $3.96, with a 58% sequential growth and a 167% increase versus the year-ago quarter.

Publication Date: Dec -20

                                    📋 Highlights
                                    Record Revenue and Growth::
                                                Fiscal Q1 revenue reached $13.6 billion, up 21% sequentially and 57% year-over-year, with DRAM revenue at $10.8 billion (up 69% YoY) and NAND at $2.7 billion (up 22% YoY).
Margin Expansion::
                                                Consolidated gross margin hit 56.8% in Q1, a 11-point sequential rise, and guidance for Q2 at 68% (±100 bps) reflects strong pricing and cost control.
HBM Market Leadership::
                                                Secured full 2026 HBM supply agreements, including HBM4, with TAM projected to grow from $35B in 2025 to $100B by 2028—two years earlier than prior forecasts.
CapEx Increase::
                                                Fiscal 2026 capital spending raised to $20 billion (+$2B) to boost HBM and 1-gamma production, accelerating capacity to meet demand in a tight supply environment.

                                

Strong Demand and Supply Constraints Drive Performance

The company's strong execution across end markets and products in a tight supply environment drove its financial performance. Total company revenue, DRAM and NAND revenue, as well as HBM and data center revenue, reached new records. The company expects these tight market conditions to persist beyond calendar 2026, driven by sustained and strong industry demand and supply constraints.

HBM Business: A Key Growth Driver

Micron Technology has completed agreements on price and volume for its entire calendar 2026 HBM supply, including its industry-leading HBM4. The company forecasts an HBM total addressable market (TAM) compound annual growth rate (CAGR) of approximately 40% through calendar 2028, from around $35 billion in 2025 to $100 billion in 2028. This $100 billion HBM TAM milestone is now projected to arrive two years earlier than previously expected.

Valuation and Outlook

With a P/E Ratio of 25.12 and an EV/EBITDA of 14.82, the market appears to have priced in a significant portion of Micron Technology's growth prospects. However, with analysts estimating revenue growth of 90.1% next year, there may be further upside potential. The company's strong competitive position, particularly with its HBM4 product, and its plans to increase supply capability and invest in new clean room space, are expected to drive continued growth.

Guidance and Future Expectations

Micron Technology expects revenue to be a record $18.7 billion, plus or minus $400 million, in fiscal Q2, with a gross margin of 68%, plus or minus 100 basis points. EPS is expected to be a record $8.42 per share, plus or minus $0.20. The company is focused on managing the mix of HBM and non-HBM business, with both having strong profitability, and is negotiating long-term customer contracts with specific commitments.

3. NewsRoom

2 Top Artificial Intelligence Stocks to Buy in February

Feb -06

Source: fool.com

Is It Too Late to Buy Micron Stock? Not According to This Bull

Feb -06

Source: 247wallst.com

Micron Stock Slips as Analyst Predicts Zero Nvidia Orders for HBM4 Chips

Feb -06

Source: gurufocus.com

Micron Stock Climbs Despite Losing Nvidia HBM4 Orders

Feb -06

Source: gurufocus.com

Micron: This Week's Dip Is A Gift

Feb -06

Source: seekingalpha.com

Micron Is on an Epic Run. Don't Fear the Memory-Chip Cycle.

Feb -06

Source: barrons.com

Micron Stock To $700?

Feb -06

Source: forbes.com

5 Growth Stocks to Buy in February to Enhance Your Portfolio Returns

Feb -06

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.37%)

6. Segments

Compute and Networking Business Unit (CNBU)

Expected Growth: 8.5%

Growing demand for memory products in computing, networking, and data center applications driven by increasing adoption of AI, cloud computing, and 5G technology. Expansion of data center infrastructure and rising need for high-performance memory solutions will fuel growth, driven by Micron's technological advancements and diversified product portfolio.

Mobile Business Unit (MBU)

Expected Growth: 10.5%

The Mobile Business Unit (MBU) is poised for growth driven by increasing demand for high-performance memory and storage in 5G-enabled smartphones, emerging AI and IoT applications, and the need for advanced storage solutions in mobile devices, with a forecast CAGR of 10.5% through 2025.

Embedded Business Unit (EBU)

Expected Growth: 8.5%

The EBU's growth is driven by increasing demand for memory and storage in IoT, automotive, and industrial applications. Expansion into emerging tech like AI, 5G, and edge computing, alongside Micron's tech advancements, will fuel an 8.5% CAGR. Growing adoption of connected devices and sophisticated data processing needs will sustain growth.

Storage Business Unit (SBU)

Expected Growth: 10.5%

The Storage Business Unit is expected to grow at a CAGR of 10.5% driven by increasing demand for NAND and NOR flash memory solutions in 5G, AI, and IoT applications. Growing adoption of cloud storage, edge computing, and autonomous vehicles will fuel growth, with Micron's technology advancements and expanding production capacity supporting market share gains.

All Other

Expected Growth: 5.0%

The 'All Other' segment of Micron Technology, Inc. is expected to grow at a CAGR of 5% driven by increasing licensing revenue and minor operations. This growth is attributed to the company's expanding intellectual property portfolio and strategic partnerships, leading to higher royalty income and other miscellaneous revenue streams.

7. Detailed Products

DRAM (Dynamic Random Access Memory)

A type of volatile memory that stores data in a series of capacitors, used for temporary data storage in a wide range of applications.

NAND Flash Memory

A type of non-volatile memory that stores data even when power is turned off, commonly used for storage in a variety of devices.

NOR Flash Memory

A type of non-volatile memory that provides fast random access and is often used for code storage and execution.

3D XPoint Storage

A type of non-volatile memory that offers high performance and low latency, designed for use in storage devices.

Graphics Processing Units (GPUs) and High-Performance Memory

Specialized memory products designed for use in graphics processing units (GPUs) and other high-performance computing applications.

Memory and Storage for Automotive

A range of memory products designed for use in automotive systems, including DRAM, NAND Flash, and NOR Flash.

Memory and Storage for Mobile Devices

A range of memory products designed for use in mobile devices, including smartphones and tablets.

8. Micron Technology, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Micron Technology, Inc. operates in the semiconductor industry, where substitutes such as flash memory and DRAM are available. However, the company's products are highly specialized and have a strong reputation, which reduces the threat of substitutes.

Bargaining Power Of Customers

Micron Technology, Inc. has a diverse customer base, including major technology companies. While customers have some bargaining power, Micron's products are essential components in many devices, which limits their ability to negotiate prices.

Bargaining Power Of Suppliers

Micron Technology, Inc. relies on suppliers for materials and equipment. While suppliers have some bargaining power, Micron has long-term relationships with many of its suppliers and has a strong negotiating position.

Threat Of New Entrants

The semiconductor industry has high barriers to entry, including significant research and development costs, complex manufacturing processes, and a need for highly specialized talent. This reduces the threat of new entrants.

Intensity Of Rivalry

The semiconductor industry is highly competitive, with many established players competing for market share. Micron Technology, Inc. competes with companies such as Samsung, Intel, and SK Hynix, which increases the intensity of rivalry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	23.69%
Debt Cost	6.31%
Equity Weight	76.31%
Equity Cost	10.15%
WACC	9.24%
Leverage	31.04%

11. Quality Control: Micron Technology, Inc. passed 4 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Analog Devices

A-Score: 5.3/10

Value: 1.0

Growth: 5.3

Quality: 7.4

Yield: 4.0

Momentum: 7.0

Volatility: 7.0

1-Year Total Return ->

Micron

A-Score: 5.1/10

Value: 2.8

Growth: 6.7

Quality: 8.0

Yield: 0.0

Momentum: 10.0

Volatility: 3.0

1-Year Total Return ->

AMD

A-Score: 4.4/10

Value: 0.2

Growth: 6.8

Quality: 6.9

Yield: 0.0

Momentum: 9.5

Volatility: 3.0

1-Year Total Return ->

GLOBALFOUNDRIES

A-Score: 3.8/10

Value: 6.0

Growth: 5.0

Quality: 4.2

Yield: 0.0

Momentum: 3.0

Volatility: 4.7

1-Year Total Return ->

Intel

A-Score: 3.6/10

Value: 4.5

Growth: 1.2

Quality: 3.5

Yield: 1.0

Momentum: 9.0

Volatility: 2.7

1-Year Total Return ->

ON Semiconductor

A-Score: 3.4/10

Value: 2.7

Growth: 6.9

Quality: 5.3

Yield: 0.0

Momentum: 2.0

Volatility: 3.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

22.82%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.24%

Micron Technology, Inc. - US5951121038

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on MU

1.c. Company Highlights

Lower Growth

Strong Momentum

Lower Quality

Earnings Beats

Revenues Beats

Average Growth

Average Quality

Stable Momentum

Fairly Valued

Medium Volatility

Weak Momentum

Better Quality

Average Yield

2. Micron Technology's Q1 FY2026 Earnings: A Record-Breaking Performance

Strong Demand and Supply Constraints Drive Performance

HBM Business: A Key Growth Driver

Valuation and Outlook

Guidance and Future Expectations

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.37%)

6. Segments

Compute and Networking Business Unit (CNBU)

Expected Growth: 8.5%

Mobile Business Unit (MBU)

Expected Growth: 10.5%

Embedded Business Unit (EBU)

Expected Growth: 8.5%

Storage Business Unit (SBU)

Expected Growth: 10.5%

All Other

Expected Growth: 5.0%

7. Detailed Products

DRAM (Dynamic Random Access Memory)

NAND Flash Memory

NOR Flash Memory

3D XPoint Storage

Graphics Processing Units (GPUs) and High-Performance Memory

Memory and Storage for Automotive

Memory and Storage for Mobile Devices

8. Micron Technology, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Micron Technology, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

394.69$

Current Price

394.69$

12.e Scoring ^Insights

12.f DCF ^BETA