Base exchange rate: 1 USD = 1,478 KRW (as of 2026-04-30)
Executive Summary
Micron Technology (NASDAQ: MU), the largest memory and storage semiconductor company in the United States, is entering an unprecedented phase of growth driven by a surge in demand for HBM (High Bandwidth Memory) and a sharp increase in investment in AI infrastructure.
Revenue for the second quarter of fiscal year 2026 (FY2Q26, as of the end of February 2026) was $23,860M (approximately 35.2631 trillion KRW), showing rapid growth of +196% compared to the same period last year, and EPS was $12.07, recording an earnings surprise of 38.8% against the consensus of $8.79.
FY3Q26 guidance forecasts record-high quarterly earnings with revenue of $33.5B (±$750M), gross profit margin of ~81%, and EPS of ~$19.15.
| item | detail |
|---|---|
| Current stock price | $518.46 (As of 2026-04-29) |
| 12-Month Target Price (Default) | $820 |
| Expected rate of return | +58% |
| Investment Opinion | Strong Buy |
| Market capitalization | $584.7B (approx. 864 trillion won) |
Key Investment Points: 2026 HBM4 production capacity of 1,001 TP3T pre-sales completed (binding contract), FY3Q26 guidance at an all-time high (revenue 1 TP4T33.5B, operating profit margin ~811 TP3T), and a forward P/E of 5.1x, indicating extreme undervaluation relative to growth.
Company Overview
Micron Technology is one of the world's top three memory semiconductor companies, founded in Boise, Idaho, USA in 1978.
It designs, manufactures, and sells DRAM and NAND flash, supplying them to data center, PC, mobile, and automotive markets. It has approximately 53,000 employees.
Business Segments and Revenue Composition
Micron operates in four segments: the Cloud Memory BU, Core Data Center BU, Mobile & Client BU, and Auto & Embedded BU.
As of FY2Q26, revenue from the cloud business unit was $7.75B (up 160% from the previous year), and revenue from the mobile and client business unit was $7.71B, with the two segments accounting for approximately 65% of total revenue.
Key Products and Competitive Landscape
The core products are DRAM (DDR5, LPDDR5), HBM3E/HBM4, data center SSDs, UFS/eMMC, and NOR flash.
Through the Integrated Design Manufacturing (IDM) method, it possesses price negotiation power and a competitive advantage in technology internalization.
Samsung Electronics and SK Hynix are the major competitors. SK Hynix holds the number one market share in the HBM market, but Micron is rapidly expanding its market share through improved HBM3E yield and early shipments of HBM4.
In the AI semiconductor ecosystem, Micron's memory products are essential components, NVIDIA (NVDA) Blackwell and Rubin GPUsAs an HBM supply partner, it is directly benefiting from the demand for AI infrastructure.
Financial Performance Analysis (Last 4 Quarters)
Micron's earnings have continued their rapid growth for four consecutive quarters. In particular, the gross profit margin of 74.41 TP3T in FY2Q26 is an unprecedented level in the history of the semiconductor industry.
Quarterly Sales and Profit Trends
| division | FY3Q25 (May 2025) | FY4Q25 (2025.08) | FY1Q26 (2025.11) | FY2Q26 (2026.02) |
|---|---|---|---|---|
| sales | $9,301M (approx. 13.7 trillion won) | $11,315M (approx. 16.7 trillion won) | $13,643M (approx. 20.2 trillion won) | $23,860M (approx. 35.3 trillion won) |
| Gross profit | $3,508M | $5,054M | $7,646M | $17,755M |
| Operating profit | $2,169M | $3,693M | $6,136M | $16,135M |
| net profit | $1,885M | $3,201M | $5,240M | $13,785M (approx. 20.4 trillion won) |
| Diluted EPS | $1.68 | $2.83 | $4.60 | $12.07 |
| QoQ sales growth | – | +21.7% | +20.6% | +74.9% |
Profitability Indicators (Quarterly Margin Trends)
| division | FY3Q25 | FY4Q25 | FY1Q26 | FY2Q26 |
|---|---|---|---|---|
| Gross profit margin | 37.7% | 44.7% | 56.0% | 74.4% |
| Operating profit margin | 23.3% | 32.6% | 44.9% | 67.6% |
| Net profit margin | 20.3% | 28.3% | 38.4% | 57.8% |
The gross profit margin of 74.41 TP3T in FY2Q26 is the result of the increased proportion of high-value-added AI memory such as HBM4 and the direct reflection of premium prices in data centers.
Recent Earnings Announcement — FY2Q26 Earnings Surprise
Earnings for FY2Q26 (ending February 31, 2026) significantly exceeded market consensus. Diluted EPS of 12.07 recorded a surprise of +38.81 compared to the consensus of 8.79.
Year-over-year (FY2Q25) comparison: Revenue $8,053M → $23,860M (+196.3%), Net Profit $1,583M → $13,785M (+770.7%), EPS $1.41 → $12.07 (+756%).
Operating cash flow was 11,903M (approx. 17.6 trillion won), a sharp increase of 41.51T from 18,411M in the previous quarter.
Financial Health (as of FY2Q26)
It transitioned to a net cash of +3,791M with cash and short-term investments of $14,589M (approx. 21.6 trillion won) and total liabilities of $10,798M (approx. 16.0 trillion won).
Liquidity is excellent with a current ratio of 2.90 and a quick ratio of 2.23. The debt burden is very low with a D/E ratio of 14.9%.
Quarterly Trend of Free Cash Flow (FCF)
| division | FY3Q25 | FY4Q25 | FY1Q26 | FY2Q26 |
|---|---|---|---|---|
| Operating cash flow | $4,609M | $5,730M | $8,411M | $11,903M |
| Capital expenditure (CapEx) | $2,938M | $5,658M | $5,389M | $6,387M |
| Free cash flow | $1,671M | $72M | $3,022M | $5,516M |
TTM (last 12 months) free cash flow is $10,281M (approximately 15.1953 trillion KRW). As investment in the HBM plant expansion has passed its peak, FCF is improving rapidly.
Valuation
| characteristic | Current value | Industry average | evaluation |
|---|---|---|---|
| Trailing P/E | 24.4x | 25~30x | titration |
| Forward P/E (NTM) | 5.1x | 18~22x | Extreme undervaluation |
| P/S (TTM) | 10.1x | 4~6x | premium |
| P/B | 8.1x | 3~5x | Overvalued |
| PEG | 0.29x | 1.0x or higher | Extreme undervaluation |
A forward P/E of 5.1x is about one-quarter of the semiconductor industry average.
Based on TTM FCF 10,281M, the fair stock price range is estimated to be $750~$900 in the DCF analysis applying a future 3-year FCF CAGR of 35% and a discount rate of 10%.
Market Consensus (42 Analysts): Strong Buy, Median Target Price $549, High Target Price $1,000 (DA Davidson).
The same AI memory sector SanDisk (SNDK)Even when compared to others, Micron's valuation is significantly lower relative to its earnings growth.
Growth Outlook
FY3Q26 guidance (quarter ending May 2026): Revenue $33.5B (±$750M), EPS ~$19.15, Gross margin ~81%. This represents approximately 40% QoQ growth compared to the previous quarter.
The key growth drivers are the following four: First, full pre-sale of HBM4: completion of binding contracts for a calendar annual production of 1,001 TP3 T/L for 2026. Second, expanded supply of HBM for NVIDIA Blackwell and Rubin GPU series. Third, a surge in demand for AI data center DRAM from cloud providers (AWS, Azure, and Google). Fourth, the increase in LPDDR5 capacity in smartphones and PCs driven by on-device AI.
Composite growth rate estimate (NTM basis): Historical growth (40% weighted) + Analyst estimate (40% weighted) + Industry growth (20% weighted) = Continued growth of approximately 50–70% expected.
Within the AI semiconductor value chain AMD (AMD) Expands Orders for MI450 AI GPUsIt can also serve as an additional growth driver for Micron's HBM demand.
1-Year Target Price Scenario
| scenario | Probability | home | Target EPS | Applied P/E | Target price | Expected rate of return |
|---|---|---|---|---|---|---|
| basic | 50% | Sustained AI demand maintains HBM margins | $95 | 8.5x | $808 | +56% |
| stress | 25% | HBM4 Margins Further Expand, Market Share Rises | $110 | 9.0x | $990 | +91% |
| Weakness | 25% | AI CAPEX Plunges, Price Adjustment | $70 | 7.5x | $525 | +1% |
Weighted average expected stock price: ($808×0.5) + ($990×0.25) + ($525×0.25) = approx. $783.
Expected return of +511 TP3 T. This is a very attractive risk/reward ratio, even within the semiconductor industry.
Recent Major News (2026)
- [March 2026] Major Earnings Surprise in FY2Q26EPS 12.07 (+38.81 TP3T over consensus), cloud revenue surges 1,601 TP3T. Operating CF 11.9B, all-time high.
- [March 2026] FY3Q26 Guidance Reaches All-Time High: Guidance provided for revenue of 33.5B, EPS of ~19.15, and gross profit margin of ~811.1B.
- [March 2026] Pre-sale of all HBM4 confirmed: 2026 Calendar Annual HBM4 Capacity 100% Binding Contract Completed.
- [2026.04] DA Davidson Target Price $1,000 PresentedStreet's highest target price, initiate Buy — AI memory supercycle beginning.
- [2026.04] TD Cowen $660, Melius Research $700 increasedTarget prices raised across the board following confirmation of HBM demand from multiple institutions.
- [52-week return +566%]: $77.64 to $518.46 — One of the highest-return stocks in the semiconductor sector.
Risk factors
- Semiconductor business cycle risk: Possibility of a repetition of the memory industry's characteristic oversupply-price collapse cycle.
- Possibility of a Sharp Decline in AI CAPEX: Demand shock when Big Tech adjusts the pace of data center investment.
- Chasing after competitors (Samsung and SK Hynix)Premium price pressure as Samsung HBM yield improves.
- Geopolitical risks (China export restrictions)Sales in the Chinese market to be hit if U.S. tightens AI semiconductor export controls.
- Valuation Risk (P/S Basis)A TTM P/S of 10x implies the possibility of multiple reduction at the cycle high.
Investment Opinion — Strong Buy
Investment Opinion: Strong Buy | Confidence: High | Investment Period: 12 Months | Weight Recommendation: 5–81 TP3T of Portfolio
The earnings surprise in FY2Q26, the confirmation of full pre-sales of HBM4, and the forecast of record-high quarterly earnings (FY3Q26 guidance revenue of $33.5B) strongly suggest that Micron is entering an AI memory supercycle.
A forward P/E of 5.1x is an unprecedented undervaluation in the semiconductor industry, supported by a unanimous Strong Buy from 42 analysts.
However, due to the high volatility inherent in the semiconductor cycle, a split buying strategy is recommended.
This report is an analysis prepared for investment reference purposes only, and the investor bears sole responsibility for investment profits and losses. Please be sure to review public disclosures and expert advice before investing.
※ This article was written based on publicly available data with the assistance of AI research tools, and the content was reviewed by the author prior to publication. It is for informational purposes only and does not constitute an investment recommendation.