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Micron Technology (MU) shares have risen more than two-fold year-to-date, making them the fourth-best performer in the S&P 500; measured from a closing price of about $84 in 2024, the cumulative gain is roughly 10x. The stock rose 239% in 2025 and more than doubled again in 2026, at one point touching a 52-week high of $1,255. The market’s core debate now is: with the memory chip shortage expected to persist through 2027–2028, can Micron extend its rally, or is a cyclical peak quietly approaching?
On fundamentals, Micron’s earnings growth has been staggering. Fiscal 2026 (ended September 3) revenue reached $133.2 billion, more than 3.5 times the prior fiscal year; GAAP earnings per share were $74.33, nearly ten times the $7.59 in fiscal 2025. Management expects fiscal 2027 earnings per share of $176.55. The company’s gross margin is 80.71%; with memory prices surging on supply-demand imbalance driven by AI computing buildout while input costs have changed little, price increases flow almost directly to profit.
On valuation, Micron trades at about 12 times fiscal 2026 results and only about 5 times analysts’ adjusted profit forecasts for fiscal 2027. Some argue that for a tech company growing this fast, such a low P/E means the market does not believe the high profits can last. If Micron merely meets analysts’ fiscal 2027 expectations and the P/E re-rates to 15 times, the stock would need to rise about two-fold from current levels; at 20 times, it would need to rise about three-fold.
History, however, offers an important warning. Micron has posted back-to-back triple-digit annual gains only once before: up 146% in 1993 and 137% in 1994. After another 80% gain in 1995, the stock peaked on September 11 and fell about 58% from that high by year-end, then dropped another 26% in 1996—even as quarterly profits were still hitting new records, with the share price decline leading the profit downturn.
After a 300% gain in 2009, the stock fell 24% in 2010 despite fiscal 2010 net income of $1.85 billion; in fiscal 2011, average DRAM selling prices fell 39% and earnings plunged about 91%. After gains of 243% in 2013 and 61% in 2014, the stock fell 60% in 2015 even though fiscal 2015 net income of $2.9 billion was only slightly below fiscal 2014’s $3.0 billion; by fiscal 2016, DRAM prices had fallen 35% and the company lost $276 million.
Current price action may already show similar signs. Micron hit a closing high of $1,213.56 in late June and is now about 26% below that peak, even as earnings continue to grow. But growth is slowing: on a non-GAAP basis, per-share profit grew 106% from the second to the third fiscal quarter, then slowed to 33% in the fourth quarter, to $33.42; management’s guidance for the first quarter of fiscal 2027 is about $38.15, implying growth of roughly 14%.
DRAM price increases also slowed from more than 60% in the third fiscal quarter to the low teens percentage-wise in the fourth. Unlike past cycles, memory prices are still rising—just more slowly. CEO Sanjay Mehrotra said on the earnings call, “We don’t see when supply and demand will come back into balance.”
Overall, Micron’s current valuation already prices in some downside expectations, and long-term investors may find it worth watching; but given that the stock has historically peaked and rolled over ahead of profits, investors building positions should leave room for the next downturn.
