Stocks: The bull case for Micron
Introduction
Due to a combination of both job-hunting (which is thankfully now over yayyy) and procrastination, I have not posted here for three months. But hopefully I will use the time in May to finish up my series on MRBS and also share other bits and pieces (and ramblings) that comes to my mind.
Today I will be exploring the bull case for Micron, a stock that has garnered significant interest for me since September last year, and why I believe that the price will remain optimistic for 2026.
| DISCLAIMER: I am not a financial advisor. The information provided here is purely from my own due diligence and an expression of my thoughts, opinions, and personal experiences. It is not intended to be and does not constitute financial or investment advice. You should consult a licensed professional to determine what may be best for your individual needs.
What is Micron??
Micron Technology (MU) is a semi-conductor company that designs, develops, and manufactures memory and storage products (DRAM, NAND flash, SSDs, etc). If you are familiar with consumer electronics, Micron markets its consumer products under Crucial (which are kinda well known for their RAM).
One misconception some may have is that they make chips like Intel, AMD, and NVIDIA. However, the aforementioned companies make processing chips (compute power), while Micron specializes in memory and storage chips (RAM, SSDs, etc). Vastly different, and both are required in any computer/server/data center.
Chart analysis
Since the launch of ChatGPT (which is usually tied to the start of the AI boom), Micron has surged by an incredible 993% as compared to SPY's 111% from November 2022 to May 2026.
The chart is a bit small, so you might want to open your own chart to look for the breakout pattern.
However, from the chart, we can observe that MU's growth was relatively comparable to the index, with a fair bit of sideways trading from Mar 2024 to May 2025.
The first breakout in 2025 happened in September, with one more in December and a third breakout recently in March this year. All three breakouts followed the classic double-top breakout pattern. Currently, it is consistently climbing, which begs the question - is MU still a good buy?
Micron's fit in the AI market
Ever since the sudden explosion in NVDA's growth, there has been concerns about the AI bubble. However, the recent bull runs has demonstrated that there are clear winners who will benefit from the AI boom.
Micron plays a key role in AI compute through its memory and storage products (High Bandwidth Memory (HBM) specifically), which is a key component in AI computing. The question is not whether AI will be profitable - it is which software companies will benefit the most from AI. And no matter which software company emerges as the winner (which is still difficult to tell right now), Micron will benefit from the hardware side.
Micron also does not have significant competition in the memory and storage market. It is one of the "Big Three" computer memory manufacturers (Samsung Electronics and SK Hynix being the other two), and Micron is the only major American memory manufacturer. From a geopolitical standpoint, if there are any tariffs imposed on the South Korean market, Micron is less likely to be affected.
Fundamentals
MU has a P/E ratio of 25.60, which lower than INTC (negative), NVDA (40.49), AVGO (82.18), and AMD (136.32), indicating that the share price is relatively undervalued compared to its peers.
However, I do tend to take P/E ratio with a grain of salt as there are usually other drivers, some stocks can maintain an obscene P/E ratio for a long time (e.g. PLTR's 227.67 P/E ratio - you are paying $227 for every $1 earned!).
The forward P/E (which indicates the price relative to future earnings) is at 5.67, which is extraordinarily low (which is kinda scary honestly). Assuming the P/E ratio climbs to a value of 20 in the next year, and Micron meets earnings, this will indicate a stock price of $1912.55, a 3.5x increase.
SEMICONDUCTOR STOCKS ARE CYCLICAL
From the fundamentals, MU looks like a great buy right now. But why are people not buying it?
The biggest concern: semiconductor stocks tend to be cyclical. It is likely that it is currently the peak of the cycle, and MU's growth will not be sustained.
The demand for AI depends on the broader macro-economy and a plethora of other factors. When the demand for AI plateaus, so will the demand for semiconductors (there will still be other factors driving demand, but right now the biggest driver is AI). When companies have scaled sufficiently, the demand for semiconductors (including memory and storage chips) will slow down.
It is likely that many investors are cautious of MU, which results in a low forward PE ratio - they believe that MU is a value trap.
However, I do believe that Micron will still face a strong demand regardless. The boom of AI has resulted in enormous amounts of data being generated (look at Github pull requests for example, Github was unable to keep up with the volume of pull requests generated by AI agents). These data will need to be stored somewhere, thus sustaining the demand for storage chips.
In conclusion, MU challenges the case that this is just another peak in the cycle, the profits are sustainable.
How high can it go?
NVDA was the first stock to experience significant gains in the AI era. Let's put them side by side:
What do you see?
MU has been relatively stagnant compared to NVDA - by a period of about 1.5 years. If MU were to follow the same trajectory, it has the potential to go much higher, up to a $1000 price range (this coincides with the highest price target set by DA Davidson, but the analyst who came up with the target does not have a high success rate, like me).
As such, I will set the price target of $600, which I am confident it will reach before September 2026.
Its current price of $542 is fairly risky. A dip to the $470 range is possible, which will make the stock a good buy. A dip to the $310 range is extremely unlikely, but will make the stock a strong buy (assuming it does not fall below $300).
Broadcom
Another stock which has significant potential is Broadcom (AVGO), which is a relatively safer alternative compared to Micron (hence the tradeoff of the higher price). AVGO offers stronger diversification through its acquisition strategy.
As pointed out by a Redditor, Broadcom's CEO is laser focused on improving the value for shareholders.
Conclusion
TLDR: MU has a strong case, best day to buy it was yesterday, the next best day is today.
Also I am not an expert, please do not trust this blog. I am just sharing my thoughts out of passion
Sources
Data are retrieved from these sources:
Mingyang
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