Key Points

Micron posted exceptional quarterly results and raised its forecast significantly.
The stock has climbed roughly 229 percent year to date.
Shares trade at just 6 times expected earnings over the next year.

Micron Technology (NASDAQ: MU) delivered another round of strong results in its fiscal 2026 third quarter, powered by intense demand for its artificial intelligence memory chips.

Revenue for the period ending May 28 reached $41.5 billion, marking a 74 percent sequential rise and a 346 percent jump from the prior year. Net income climbed 105 percent quarter over quarter and 205 percent year over year to $28.2 billion, surpassing analyst expectations.

The company also provided guidance for fiscal Q4 that exceeded forecasts. It projects $50 billion in revenue, a 20 percent increase from the prior quarter, and earnings of $30.73 per share, up 25 percent sequentially. Analysts had anticipated $42.5 billion in sales.

Growth stems from surging need for Micron high bandwidth memory chips used in data center servers to handle large AI data sets.

Micron has sold out its HBM output for the remainder of 2026 and has already committed full capacity through 2027. CEO Sanjay Mehrotra noted on the earnings call that tight supply conditions are likely to continue past 2027 due to AI demand and structural limits on production.

Pricing power

Strong demand paired with limited supply has given Micron greater ability to raise prices across cloud memory, data center, and mobile segments.

Cloud memory revenue rose 78 percent sequentially while gross margins expanded 9 points to 83 percent. Data center sales increased 103 percent sequentially on higher prices and product mix, with margins climbing 12 points to 87 percent. Mobile revenue grew 49 percent quarter over quarter and margins rose 9 points to 87 percent.

Micron also signed strategic customer agreements with 16 clients featuring three- to five-year terms and defined pricing ranges. These deals aim to stabilize cash flow and margins. Management expects at least half of revenue to fall under such contracts by the end of their terms.

Micron shares have risen 229 percent this year amid a large backlog, sustained product demand, pricing strength, and a memory cycle projected to last through at least 2028. Despite the gains, the stock appears attractively valued at 21 times trailing earnings, 6 times forward earnings, and a five-year PEG ratio of 0.14. These factors support continued investor interest in Micron Technology.