Is Micron's Cheap Valuation an Opportunity to Invest in the Stock?

Micron Technology, Inc.’s MU current valuation suggests that the stock is available at a discounted price compared with the sector average. MU stock trades at a forward 12-month price-to-earnings (P/E) ratio of 14.28, significantly lower than the Zacks Computer and Technology sector’s average of 28.65.

Micron Forward 12-Month P/E Ratio

The stock’s P/E multiple is also lower than major semiconductor players, including NVIDIA NVDA, Advanced Micro Devices AMD and Broadcom AVGO. At present, NVIDIA, Advanced Micro Devices and Broadcom have P/E multiples of 32.26, 38.35 and 39.35, respectively.

Micron’s cheap valuations look even more surprising when we look at its year-to-date (YTD) share price performance. MU stock has delivered a robust 182.7% gain YTD, outperforming the sector’s return of 24.3%. It has also outperformed major semiconductor players, including NVIDIA, Broadcom and Advanced Micro Devices, which have gained 40.1%, 50.7% and 93.3%, respectively, YTD.

Micron’s YTD Price Return Performance

Despite solid year-to-date gains, MU’s valuation remains low, prompting investors to ponder if this represents a buying opportunity. To make an informed decision, it is essential to first examine the fundamental strengths and weaknesses of this major energy infrastructure company.

Industry Trends Bolster Micron's Long-Term Prospects

Micron sits at the heart of several transformative tech trends. Its exposure to artificial intelligence (AI), high-performance data centers, autonomous vehicles and industrial IoT uniquely positions the company for sustainable long-term growth. As AI adoption accelerates, the demand for advanced memory solutions like DRAM and NAND is soaring. Micron’s investments in next-gen DRAM and 3D NAND ensure it remains competitive in delivering the performance needed for modern computing.

The company’s diversification strategy is also yielding positive results. Micron has created a more stable revenue base by shifting its focus away from the more volatile consumer electronics market and toward resilient verticals such as automotive and enterprise IT. This balance enhances its ability to weather cyclical downturns, a critical trait in the semiconductor space.

Micron is also riding on a strong wave in high-bandwidth memory (HBM) demand. Its HBM3E products are attracting significant interest for their superior energy efficiency and bandwidth, which are ideal for AI workloads.

In January 2025, NVIDIA confirmed that Micron is a core HBM supplier for its GeForce RTX 50 Blackwell GPUs, signaling deep integration in the AI supply chain. Additionally, its newly announced HBM advanced packaging facility in Singapore, set to launch in 2026 with further expansion in 2027, underscores the company’s commitment to scaling production for AI-driven markets.

Micron’s Strong Financial Performance

Despite ongoing macroeconomic challenges, geopolitical issues, and trade and tariff wars, Micron’s financials remain rock solid. In fiscal 2025, revenues jumped 48.9% year over year, while non-GAAP earnings per share (EPS) rose more than sixfold to $8.29 from $1.30 in fiscal 2024.

The company reported a non-GAAP gross margin of 40.9%, a robust improvement from 23.7% in fiscal 2024. Non-GAAP operating income increased to $10.85 billion from $1.94 billion in 2024, reflecting the company’s ability to convert strong revenue growth into bottom-line gains.

Analysts’ expectations for fiscal 2026 depict continued growth momentum for Micron. The Zacks Consensus Estimate for fiscal 2026 revenues and EPS calls for year-over-year growth of 42.5% and 95.7%, respectively. The consensus mark for fiscal 2026 and 2027 EPS has been revised upward by 24.4% and 19.1%, respectively, over the past 60 days.

Final Thoughts: Buy Micron Stock for Now

Micron’s fundamentals remain strong, and its position in the AI-driven memory market is well-established. The company offers compelling long-term growth potential, maintains a disciplined approach to innovation and trades at a discount relative to peers. Considering these factors, it is prudent to accumulate MU stock.

Currently, MU sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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