Buy Micron Stock After AI Memory Demand Fuels Record Q4 Results?

Micron Technology MU) delivered another blockbuster earnings report on Wednesday, with surging demand for high-bandwidth memory (HBM), data-center storage, and tighter memory supply driving record results for its fiscal fourth quarter.

The memory-chip giant continues to benefit from accelerating AI infrastructure spending, particularly as advanced accelerators from Nvidia NVDA) and Advanced Micro Devices AMD) require increasingly large amounts of high-performance memory.

Micron Delivers Another Blowout Quarter

Micron reported record quarterly earnings of $33.42 per share, soaring from Q4 EPS of $3.03 a year ago and beating the Zacks Consensus Estimate of $31.61 by nearly 6%.

Revenue surged 379% year over year to a quarterly peak of $54.23 billion, topping expectations by more than 6%. Furthermore, Micron's adjusted gross margin reached approximately 87%, highlighting the dramatic improvement in memory pricing and product mix.

For its full fiscal year 2026, Micron posted record adjusted EPS and revenue of $75.52 per share and $133.19 billion, up a staggering 883% and 256%, respectively.

AI infrastructure remains the biggest catalyst. Data-center solid-slate drive (SSD) revenue approached $10 billion in Q4, more than 10 times the year-ago level and accounting for over two-thirds of Micron's NAND revenue. Meanwhile, Micron continues to ramp up its HBM4 production and said it is working with Nvidia on a customized HBM4E product called NV-HBM for next-generation GPUs and NVLink Fusion platforms.

Micron has surpassed sales estimates in seven straight quarters and has exceeded earnings expectations for 14 consecutive quarters, with an impressive average EPS surprise of 21% in its last four quarterly reports.

Micron's Growth Outlook Remains Exceptional

Momentum isn't expected to slow much this quarter.

For its current fiscal Q1 2027, Micron expects revenue of $61.5 billion, plus or minus $1.5 billion, which would reflect roughly 350% YoY growth. The guidance also came in ahead of Wall Street's forecast of $57 billion.

Better still, Micron projects Q1 adjusted EPS of $38.15, plus or minus $1, also comfortably ahead of expectations of around $35.00, and would represent a nearly 700% increase from earnings of $4.78 per share in the prior-year quarter.

Management also expects an adjusted gross margin of roughly 86.25%, suggesting extraordinarily strong memory pricing and AI-driven demand should continue supporting profitability.

MU Stock Still Looks Cheap

Despite its stellar +250% year-to-date rally, the argument for buying Micron stock rests partly on the company’s attractive valuation.

Thanks to its explosive earnings growth, MU remains surprisingly inexpensive from a valuation standpoint even at over $1,000 a share.

MU is trading at less than 7X forward earnings, well below the broader market and its Zacks Computer - Integrated Systems industry average of around 21X.

That discount remains notable considering Micron's exposure to HBM, AI servers, data-center SSDs, and increasingly tight DRAM and NAND supply.

Bottom Line

Micron's Q4 results reinforce one of the strongest growth stories in the semiconductor industry, with AI-driven memory demand fueling extraordinary revenue, earnings, and cash-flow expansion.

For now, MU lands a Zacks Rank #3 (Hold) following the stock's enormous run in 2026. That said, a buy rating could be on the way as earnings estimate revisions are likely to move higher in the coming weeks following the memory chip leader's strong Q4 results and guidance.  

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

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