Recent market data shows Micron has experienced significant volatility, falling 5% this week despite President Trump's recent praise on Truth Social. The stock traded at $918.75 as of this writing, approximately 5% below its weekly open and about 27% under its record high of $1,255. The decline came as investors reassessed the outlook for memory-chip stocks ahead of NVIDIA's earnings announcement and amid a broader selloff in semiconductor shares. Micron is now 28% below its 52-week high of $1,254.81, despite maintaining strong fundamentals and record financial performance. The real damage occurred on August 24, when the stock dropped 5.83% - the same day rival SanDisk fell 6.45% - as the selling hit the entire memory group.
President Trump praised Micron on Truth Social Thursday afternoon, calling it one of the 'hottest' companies in the world and cheering a $10 billion research lab plan. However, the post came a week after Micron had already announced the lab, with traders having already moved on from the fresh news. The stock had initially jumped 3.97% on August 20 when the plan went public, but every gain from that day is now gone. Trump described the $10 billion as additional to a previous $250 billion pledge, but Micron's own statement says otherwise - the lab sits inside that total, not beside it. The $10 billion is spread over a decade with construction starting in 2027, making it what analysts call 'slow money' for the company.
Despite the recent selloff, Micron maintains exceptional financial performance with revenue jumping by almost 4.5x year over year in the previous quarter to $41.5 billion and adjusted earnings shooting up by 13x to $25.11 per share. The company's non-GAAP operating margin reached 81.2% in Q3 fiscal 2026, a dramatic increase from the year-ago period's reading of 26.8%. However, analysts anticipate this margin growth may eventually slow, with the company expecting non-GAAP gross margin to grow by just over one percentage point sequentially in Q4 to 86%. This potential slowdown in margin expansion is creating investor concerns about the company's ability to sustain its stunning earnings growth rate, particularly as the stock trades at just 22 times trailing earnings with a forward earnings multiple of 6.
As reported by Investing.com India, Micron Technology Inc. has secured significant long-term visibility through its 16 Strategic Customer Agreements covering roughly 20% of DRAM volume and a third of NAND volume, with take-or-pay floors that produce margins "significantly above prior peak margins." The company's HBM4 12-high shipments are ramping twice as fast as HBM3E, with over $1 billion in HBM4 revenue already booked. Importantly, Micron has confirmed that pricing and volume agreements cover its entire calendar 2026 high-bandwidth memory supply, meaning investors are increasingly focused on what happens beyond 2026 rather than questioning whether the company can sell its current output. The company's forward P/E ratio of 13x places it in a significantly undervalued position within the AI industry chain, with management explicitly stating that current price floors are well above peak gross margins from previous cycles.
The strong pricing environment fueling Micron's growth isn't expected to disappear anytime soon, with the company positioned to benefit from continued memory shortages. Citrini Research estimates that global DRAM supply will fall short of demand by 28.7 exabytes in 2030, indicating that memory demand is likely to continue exceeding supply until the end of the decade. While smartphone shipments are anticipated to drop by 14% this year due to memory supply shortages, the PC market's shipments will only recover from 2028, according to IDC. Micron had 16 long-term agreements at the end of fiscal Q3, with 14 of those agreements expected to help generate at least $100 billion in revenue over the contract term. Despite the recent selloff, Wall Street remains bullish with a consensus of 31 analysts setting the 12-month target at $1,556.55, roughly 69% above Thursday's price, with 30 analysts backing a buy rating and one saying hold.
