Financial Report Outlook | Explosive Growth vs Lagging Stock Price: Strong Demand Boosts Micron (MU.US) Q2 Earnings Surge, Analysts See $770

Micron Technology, Inc. (MU.US) will release its second-quarter financial report for the 2026 fiscal year after the U.S. stock market closes on March 18 (Wednesday) Eastern Time (early morning on March 19 Beijing Time). Wall Street analysts generally expect that due to the strong demand for high-bandwidth memory (HBM), Micron Technology, Inc. is expected to exceed $19.1 billion in revenue this quarter, with earnings per share (EPS) estimated to be close to $8.56. Prior to the release of Micron Technology, Inc.'s financial report, Seeking Alpha financial analyst Dair Sansyzbayev reaffirmed a "strong buy" rating for the company. The analyst stated that his previous bullish view on Micron Technology, Inc. at the end of 2025 has been well validated as the stock has risen by over 40% since then, while the overall market has retracted. Micron has been digesting various positive factors that have emerged over the past few months, and another positive factor is on the way. Sansyzbayev was referring to the upcoming release of the second-quarter financial report for the 2026 fiscal year, which is likely to show strong performance. Interestingly, despite the rapidly strengthening fundamentals, the stock price growth is still lagging behind the upward revision of earnings per share expectations. This means that Micron's valuation multiple is still relatively low, and the market is quite confident in its strong growth potential, supported by various structural positive factors. Earnings Preview and Recent Developments It is understood that Micron is set to release its financial report on March 18. Prior financial performance has consistently exceeded market expectations, marking the eleventh consecutive time. With such strong profit performance, it is no wonder that Wall Street analysts are optimistic about its prospects - analysts have raised their earnings per share forecasts for Micron 23 times in the past 90 days, with no decreases. The company has shown an unstoppable trend of revenue growth, with year-over-year growth rates increasing from 36.6% to 56.7% over the past three quarters, showing a significant acceleration trend. For the second quarter of the 2026 fiscal year, Wall Street analysts predict that the company's revenue growth rate will achieve a substantial leap, expected to be as high as 137%. Moreover, the company's net profit growth rate is expected to far surpass the revenue growth rate, with adjusted earnings per share expected to soar by 452%. Particularly astonishing is the forecasted earnings per share for the second quarter of the 2026 fiscal year at $1.61, which exceeds the adjusted earnings per share of $1.29 for the full year of the 2025 fiscal year. Furthermore, this peak of growth in the second quarter of the 2026 fiscal year is not a one-time occurrence. It is forecasted that Micron will maintain an average year-over-year revenue growth rate of over 100% in the next four quarters. At the same time, Wall Street analysts predict that the average earnings per share growth rate in the next four quarters will reach 332%, several times higher than the forecasted revenue growth rate. Given Micron's outstanding track record of exceeding profit expectations, the company is fully capable of achieving the aggressive forecasts for the next four quarters. Behind these remarkable figures lies a story of robust growth supported by large-scale structural positive factors. In 2026, the global artificial intelligence flywheel is speeding up, with not only leading tech giants investing billions of dollars in data centers, but also governments increasing their sovereign artificial intelligence budgets. Micron is one of the few major suppliers of high-performance memory chips for data centers. The field also includes strong competitors in Asia such as Samsung Electronics and SK Hynix. When potential market expansion is slow, competition is undoubtedly a fundamental risk; however, in the era of rapid proliferation of artificial intelligence, the situation is different. According to Sansyzbayev, this phenomenon is quite clear: memory prices continue to rise, while market demand still far exceeds total supply. This indicates that the potential market is expanding at an astonishing rate, effectively mitigating competition risks. Given that the rapid adoption of artificial intelligence has become a real long-term trend, not just a bull market trend in the regular upgrade cycle, the analyst believes that competition risks may remain at a low level in the coming years. However, Micron's management and engineering team are not complacent about the current favorable situation, but actively work to build a wide moat for the company. This is crucial because a wide moat gives a company more resilience, allowing it to cope steadily with sudden drops in demand. Currently, Micron's earnings per share are growing rapidly, and research and development investment is also steadily increasing. Thanks to the relentless pursuit of innovation, Micron's speed in introducing cutting-edge products has been consistently impressive. Recently, the company has begun sampling its customers with the industry's highest-capacity LPDRAM module - the 256GB SOCAMM2, once again showcasing its technological prowess. It is worth mentioning that Micron not only relies on its own expertise but also actively collaborates with other industry-leading companies to enhance product competitiveness. Currently, Micron is working closely with Applied Materials (AMAT.US) to develop and manufacture DRAM, HBM, and NAND solutions for artificial intelligence systems. This is not the first collaboration between the two companies; they have already established a strong and enduring technological bond. Having Applied Materials as a partner, which is known for its innovative spirit, is undoubtedly another fundamental advantage for Micron. Applied Materials not only has rich and validated successful experience, but also invests billions of dollars annually in research and development, and is recognized as a key supplier in the supply chains of iconic semiconductor companies such as Intel Corporation (INTC.US) and Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US). Valuation Update One of the most noteworthy advantages of Micron is that its earnings growth rate and expected upward revision rate far exceed the rate of increase in stock price. Over the past twelve months, the stock price of Micron has soared by an astonishing 323%, yet its valuation multiple still remains at a relatively moderate level. Specifically, its expected non-GAAP price-to-earnings ratio is slightly below 12 times, while the industry average is close to 22 times. From the earnings forecast, it is clear that Micron's expected earnings per share will increase significantly in the next few quarters, resulting in a shockingly low price-to-earnings growth ratio (PEG ratio) of 0.2, which is six times lower than the industry average. Although AMD (AMD.US) and Micron are not direct competitors, Sansyzbayev believes that it is meaningful to compare the valuation multiples of the two companies. After all, both companies are highly profitable semiconductor companies with similar market capitalizations. Furthermore, they are both popular investment targets in the field of artificial intelligence, and both have been rated as "strong buys" by SA Quant. A comparison of Micron's valuation multiples with AMD reveals that Micron's valuation is remarkably low. AMD's expected price-to-earnings ratio for the next year is nearly three times that of Micron's, but it is not entirely accurate to say that AMD's valuation is too high, as its price-to-earnings ratio is expected to undergo significant compression. Generally, such a huge difference in valuation multiples between two companies is only reasonable when the company with the higher valuation multiple demonstrates stronger growth and profitability. However, as can be clearly seen from the comparison table, Micron exhibits better growth rates and profitability ratios in almost all indicators. Therefore, Sansyzbayev believes that Micron's stock price is severely undervalued before the release of the second-quarter financial report for the 2026 fiscal year. Based on the full-year earnings per share forecast of $35.38 for Micron, multiplied by the industry median forward price-to-earnings ratio of 21.76, its target price is approximately $770. This target price is much higher than the current stock price of just over $400. Risk Update Although the valuation multiples convey extremely bullish signals, there are two factors that suggest some risk. First, Wall Street analysts believe that the upside potential for Micron's stock price may be limited, as their average target price is only slightly higher than the current stock price. Second, despite Micron's valuation multiples being at extremely low levels and earnings per share soaring, insiders are still actively selling their shares. Theoretically, if Micron does have such huge upward potential, why would they choose to sell? It is extremely difficult to accurately predict the market's reaction after the financial report is released, as it is highly influenced by geopolitical events and macroeconomic news on the day of the report. While Micron is likely to report strong earnings for the second quarter of the 2026 fiscal year and provide optimistic performance guidance, this does not guarantee that its stock price will skyrocket after the report is released. News such as heightened tensions in Iran or a significant increase in energy prices could trigger panic selling in the entire market, inevitably affecting Micron's stock price. Finally, it is worth noting that Micron's stock price has risen by over 300% in the past twelve months. In the current macro environment filled with high uncertainty, some investors may prefer to take profits after the financial report is released. Conclusion In conclusion, Sansyzbayev firmly believes that Micron Technology, Inc. remains a "strong buy" investment target before the upcoming financial report is released. Indeed, there are risks in buying stocks before the financial report is released, as market reactions can be unpredictable even if the company's performance exceeds expectations in terms of revenue and earnings, and the performance guidance is highly positive.