Of the 43 analysts on Wall Street, 38 maintained a buy rating. The current consensus target price for Micron on Wall Street is $527.60, while JPMorgan remains steadfast with a $550 target price. Analysts believe the forward price-to-earnings ratio of 7 times is significantly undervalued. However, uncertainties in future demand forecasts, industry cyclicality, and Micron's $25 billion capital expenditure pressure remain potential risks.
Micron Technology's stock price continues to plummet, with Wall Street believing it is experiencing a panic-driven selloff that severely diverges from its robust fundamentals.
On Monday, March 30th,$Micron Technology (MU.US)$the stock price plunged nearly 10% in a single day, with a cumulative decline of 30% since the release of better-than-expected earnings on March 18th.
Meanwhile, Wall Street's bullish camp remains largely unchanged, with 38 out of 43 analysts maintaining Buy or Strong Buy ratings. JPMorgan continues to uphold a $550 target price.
As mentioned by Wall Street Wisdom, last week Google announced the launch of TurboQuant, an algorithm claiming to significantly reduce memory requirements for AI model operations. Following the news, the storage and semiconductor equipment sectors were hit hard, with Lam Research plunging 9.4% on the same day and Micron falling 15.5% over the past week.
Strong financial results leave analysts unmoved.
Despite the sharp drop in stock price, Wall Street continues to show strong support.
43 coverage$Micron Technology (MU.US)$Among the 43 analysts covering the company, 38 maintained a buy or strong buy rating, with only three holding a hold rating and two issuing a sell rating. JPMorgan maintained a target price of $550 and a buy rating, basing its bullish thesis on fundamentals that TurboQuant has not materially altered.
Analysts also noted that efficiency improvements brought by algorithms like TurboQuant often drive broader adoption of AI applications, thereby expanding overall memory demand rather than permanently shrinking market size.
The financial data indeed supports this position. In the second fiscal quarter, the company’s revenue surged from $8.053 billion to $23.86 billion year-over-year, with GAAP gross margin expanding from 36.8% to 56.0%. Guidance for the third fiscal quarter projects revenue of $33.5 billion and a further increase in gross margin to 67%, both pointing to record levels.
For a company projected to achieve record highs in revenue, earnings per share, and free cash flow, a forward price-to-earnings ratio of 7x is striking, while a PEG ratio of 0.4 suggests the market anticipates a significant slowdown in performance—a view not supported by the company’s own guidance.
CEO Sanjay Mehrotra stated that due to supply constraints, key customers are currently only able to secure 'one-half to two-thirds' of their demand. Sanjay Mehrotra remarked:
Including Micron Technology's industry-leading HBM4, the full-year supply for HBM in 2026 has already been fully booked.
Risks remain, with demand forecasts continuing to be the core variable.
Behind the nearly unanimous bullish consensus, demand forecasts remain the pivotal variable.
Analysis suggests that if Google’s new storage technology indeed triggers a structural shift, the demand projections underpinning management guidance and analyst price targets may both be overly optimistic.
Moreover, the memory chip industry itself is highly cyclical, with substantial capital expenditure pressures.
$Micron Technology (MU.US)$The company plans to invest approximately $25 billion in capital expenditures in fiscal year 2026; if demand experiences a temporary vacuum, the consequences could be quite painful. Meanwhile, insider selling activity also serves as a minor warning signal.
The current Wall Street consensus target price for Micron Technology stands at $527.60, which still hinges on the sustained delivery of results in subsequent quarters.
However, as of now, the divergence between the stock price and corporate fundamentals has widened sufficiently. Whether this sell-off represents a buying opportunity or a value trap may gradually become evident in the next quarter’s supply and demand data.
Editor/Melody