Micron Technology Stock (MU) Great Growth and Undervalued (Q4 2025 Earnings)

Micron Technology (NASDAQ:MU) has been one of the breakout semiconductor names in recent quarters, riding the tailwinds of surging demand for memory and storage driven by AI, cloud computing, and data center build‐outs. In its Q4 fiscal 2025 earnings, Micron delivered results that not only beat expectations but also pointed to strong momentum continuing into fiscal 2026. In this article we will dive into Micron Technology recent earnings, stock performance & valuation, growth potential, and the risks investor should consider.

About Micron Technology

Founded in 1978, Micron Technology is a leading U.S.-based memory and storage company, known for its DRAM (Dynamic Random Access Memory), NAND, NOR, and other memory/storage products under its Micron and Crucial brands. The firm is a critical supplier for data center, mobile, client/PC, automotive, and embedded markets. Over the decades Micron Technology has evolved from producing basic memory chips to becoming a technology leader especially in high‐bandwidth memory (HBM), high‐capacity DRAM, advanced NAND, etc. The company also emphasizes manufacturing and operational excellence, and it is unique among major memory makers in being U.S.-based (with fabs also in Idaho, and investments elsewhere). Its positioning gives it strategic importance in the AI / cloud infrastructure supply chain.

Micron Financial Performance

Micron Technology’s Q4 2025 results highlight exceptional year-over-year growth across every key metric. Quarterly revenue surged to $11.31 billion, up 46% from $7.75 billion in Q4 2024, while earnings per share (EPS) jumped to $2.83, a massive 256.94% increase from $0.79 a year earlier. On a trailing-twelve-month (TTM) basis, revenue climbed 48.85% to $37.38 billion versus $25.11 billion in the prior year, and TTM EPS skyrocketed 984.29% to $7.59 from just $0.70. Free cash flow per share also improved sharply, reaching $1.48 TTM compared with only $0.11 in Q4 2024, reflecting far stronger cash generation. Profitability metrics underscore this momentum, with a gross profit margin of 39.79%, net profit margin of 22.84%, and free cash flow margin of 4.46%, while returns strengthened to a Return on Assets of 8.06% and Return on Equity of 17.2%. Financial discipline remains evident with a conservative debt-to-equity ratio of 0.28.

Over the past five years, Micron has grown its revenue at a 10.7% CAGR, net income at 20.5%, and free cash flow at 100.1%. Micron’s business declined in 2022 but has grown rapidly since then.

Micron Fiscal 2026 Financial Forecast

Looking ahead, analysts project continued acceleration, forecasting fiscal 2026 revenue of $52.56 billion a 40.62% increase from 2025 and non-GAAP EPS of $16.13, nearly doubling (up 94.53%) from the 2025 figure of $8.29. Wall Street analyst maintains a positive stance, giving a consensus Buy rating with an average price target of $173.60, implying 4.32% potential upside, and a highest target of $220, suggesting as much as 26.78% upside.

MU Stock Price Performance and Valuation

At the time this article was written, Micron’s stock was trading at $173.60 per share. The stock has risen 16.4% over the past year, outperforming the S&P 500’s 7.8% increase during the same period, and has surged 238.6% over the last five years compared with the S&P 500’s 101.7% rise. 

Despite this impressive performance, Micron still appears reasonably valued. The shares offer a modest 0.28% dividend yield, while key metrics remain compelling: a price-to-sales (P/S) ratio of 5.48 on a trailing basis and a much lower forward P/S of 3.54 reflect expectations of robust revenue growth. Profit-based measures also signal potential upside, with a non-GAAP trailing P/E of 20.07 dropping to a notably attractive forward P/E of 10.69 as earnings expand. While the price-to-free-cash-flow (P/FCF) ratio is high at 111.65.

Based on Fiscal.ai data, if we look at the valuation since 2024, the forward P/S is above the average while the forward P/E is below the average. The combination of a low forward P/E and its current level below the historical average makes it an attractive investment, and the growing demand for AI makes Micron stock one of the most undervalued AI stocks in the market.

Micron Growth Potential

Micron growth prospect remains strong, driven by several factors.

• AI-Driven High Bandwidth Memory (HBM) Market Dominance
  Micron Technology has firmly established itself as a key player in the rapidly growing High Bandwidth Memory (HBM) market, which is now its most significant growth driver. In Q4 2025, Micron's HBM3E secured prominent design wins with NVIDIA's H200 and Blackwell GB200 systems, making it the only U.S.-based supplier in this premium segment. HBM revenue reached nearly $2 billion in Q4, translating to an annualized run rate of about $8 billion.
  The entire HBM3E supply for 2025 is already sold out, with pricing agreements covering most of the 2026 capacity. The market commands premium pricing, as HBM sells at $1.49 per unit versus $0.07 for traditional NAND flash, and the segment achieved a strong 59% gross margin. AI-driven data center demand is set to grow substantially, with the HBM market projected to reach $80-100 billion by 2027-2030, presenting huge long-term revenue potential for Micron.
• Comprehensive Technology Portfolio and Market Leadership
  Micron's competitive edge extends well beyond High Bandwidth Memory (HBM), covering a full range of memory and storage solutions to meet all AI data center infrastructure layers. In Q4 2025, Micron posted a record $9 billion in DRAM revenue, up 69% year-over-year, while all segments maintained strong performance. Its Cloud Memory Business Unit alone generated $4.5 billion, making up 40% of total revenue with gross margins of 59%.
  Key to its technology leadership are advanced 1-beta DRAM and 1-gamma process nodes, notable for about 30% lower power consumption than competitors. Micron offers a full portfolio, including high-capacity DDR5, low-power LPDDR5X for edge computing, and cutting-edge data center SSDs like the Micron 9550 NVMe. Optimizing entire data hierarchies fosters deep customer integration, high switching costs, and durable competitive moats across product lines.
• Strategic Manufacturing Expansion and Domestic Production Capabilities
  Micron Technology has committed to a transformative $200 billion investment in U.S. semiconductor manufacturing and research and development. This includes $150 billion dedicated to building and expanding manufacturing facilities in Idaho, New York, and Virginia, alongside $50 billion allocated for cutting-edge R&D initiatives. The company plans to construct two state-of-the-art fabs in Idaho, up to four fabs in New York, and modernize its Virginia operations, aiming to produce 40% of its DRAM domestically.
  This effort is supported by up to $6.4 billion from the CHIPS Act, providing critical federal funding. Micron’s domestic manufacturing strategy reduces reliance on East Asian supply chains and mitigates geopolitical risks while aligning with U.S. national security goals. Co-located manufacturing and R&D in Idaho will accelerate innovation and time-to-market for advanced products like High Bandwidth Memory, completing the integration of the domestic supply chain.

Risks to Consider

While Micron’s stock looks attractive, we should be mindful of potential risks.

• Cyclical and Volatile Memory Pricing Impacting Revenue and Margins
  Memory chip prices, including DRAM and NAND, are highly cyclical and strongly influenced by supply and demand changes. Market conditions can swing from oversupply to undersupply, causing prices to fluctuate. This volatility affects revenue and profitability as price drops compress margins, while price increases may follow rising demand driven by new technologies like AI. The industry often cycles through phases of inventory buildup and reduction, impacting financial outcomes for memory manufacturers.
• Competition in the High bandwidth Memory (HBM) Market
  Competition in the high bandwidth memory (HBM) market is intensifying, particularly from Samsung and SK Hynix, which could challenge Micron’s pricing power and market share. To maintain and grow its position, Micron must continually innovate and improve operational efficiencies. The company is actively ramping up production and advanced HBM technology deployment, aiming to increase its HBM market share to around 22-24% by the end of 2025, closely matching its overall DRAM share.
• Dependency on Key Customers and Markets
  Micron depends heavily on a select group of key customers and international markets for a large portion of its revenue. This reliance creates exposure to risks such as weakening demand from these customers or disruptions caused by geopolitical tensions, which could limit market access. Changes in customer purchasing patterns or strained trade relations may adversely impact Micron’s sales, making diversification and stable customer relationships critical for sustaining growth and stability.

Read More: Boston Scientific Stock (BSX) Good Growth and Good Value in Q2 2025

Conclusion

Micron Technology’s stellar Q4 2025 results, marked by soaring revenue, explosive EPS growth, and robust margins, highlight a company entering a powerful uptrend. Despite strong multi-year stock gains, forward valuations especially a low forward P/E and declining P/S ratio suggest the shares remain attractively priced relative to its growth outlook. With analysts forecasting double-digit revenue and earnings expansion, Micron’s leadership in AI-driven memory and solid balance sheet outweigh cyclical risks, making MU a compelling investment opportunity for growth-focused investors.