Should You Add Micron Stock to Your Portfolio Ahead of Q1 Earnings?

Micron Technology, Inc. MU will report first-quarter fiscal 2026 results on Dec. 17, after market close.

The company projects fiscal first-quarter revenues to be $12.5 billion (+/- $300 million). The Zacks Consensus Estimate for the top line is pegged at $12.57 billion, which implies year-over-year growth of 44.3%.

Meanwhile, Micron estimates adjusted earnings of $3.75 (+/-15 cents). The consensus mark for the bottom line has been revised upward by a couple of cents to $3.83 per share over the past seven days, which indicates a year-over-year improvement of 114%.

The company’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 9.4%.

Earnings Whispers for Micron Technology

Our proven model predicts an earnings beat for Micron Technology this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here.

MU’s Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate ($4.06 per share) and the Zacks Consensus Estimate ($3.83 per share), is +5.97%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

MU’s Zacks Rank: MU sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors Likely to Influence Micron’s Q1 Results

Micron’s first-quarter results are poised to reflect a significant boost from the growing demand for memory chips, fueled by the increasing adoption of graphics processing unit (GPU)-enabled artificial intelligence (AI) servers. As data center operators expand their infrastructure to support generative AI and large language models, memory chips have become essential components. This surge in demand for AI-driven technologies is likely to have bolstered Micron’s revenues during the quarter under review.

Another positive factor is the improving supply-demand dynamics in the memory chip market. For several quarters, Micron faced headwinds from excess inventory across various sectors, which heavily impacted its financial results. However, conditions have improved over the past year, which has resulted in improvements in prices for its DRAM chips. According to the Zacks Consensus Estimate, DRAM revenues for the first quarter are expected to hit $10.13 billion, marking impressive 58.3% year-over-year growth.

Micron Technology has achieved an industry-first ramp of 1β DRAM, HBM3E and 232-layer/368-layer NAND, positioning it strongly for next-generation demand in the first quarter of fiscal 2026. MU is also benefiting from the improving memory pricing environment, driven by industry discipline, supply tightening and a richer product mix.

However, inflationary pressures and macroeconomic uncertainties have dampened consumer spending, likely reducing demand for memory chips in key markets, such as smartphones and personal computers. Additionally, Micron Technology’s heavy reliance on China poses a risk amid ongoing U.S.-China trade tensions.

Micron Technology Share Price Performance

Year to date, Micron Technology shares have surged 207.1%, outperforming the Zacks Computer – Integrated Systems industry’s rise of 87.3%. The stock has also outpaced major semiconductor companies, including Broadcom AVGO, Taiwan Semiconductor Manufacturing TSM and NVIDIA NVDA. Shares of Broadcom, Taiwan Semiconductor Manufacturing and NVIDIA have risen 80.8%, 54.4% and 34.7%, respectively.

Micron Technology YTD Price Return Performance

Micron’s Key Valuation Metric

From a valuation standpoint, MU appears to be trading at a discount relative to the industry and is trading well below its mean. Going by the forward 12-month price-to-earnings (P/E) ratio, the company’s shares currently trade at 13.97, significantly lower than 23.83 for the industry.

Micron Technology Forward 12-Month P/E Ratio

MU stock also trades at a discounted multiple compared to Broadcom, NVIDIA and Taiwan Semiconductor Manufacturing. At present, Broadcom, NVIDIA and Taiwan Semiconductor Manufacturing have P/S multiples of 43.5, 27.43 and 25.72, respectively.

Investment Consideration for MU Stock

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

The company’s diversification strategy is also bearing fruit. Micron Technology has created a more stable revenue base by shifting its focus from the more volatile consumer electronics market toward resilient verticals such as automotive and enterprise IT.

Micron Technology is also riding on a strong wave of high-bandwidth memory (HBM) demand. Its HBM3E products are attracting significant interest due to their superior energy efficiency and bandwidth, which are ideal for AI workloads. The continuously evolving new tech trends and diversification strategy are likely to aid MU’s growth over the long run.

Conclusion: Buy MU Stock for Now

Micron Technology’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 ahead of its first-quarter fiscal 2026 results.

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

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