Micron Technology Looks Like An Undervalued Long-Term Winner

"Our Q2 outlook reflects substantial records across revenue, gross margin, EPS and free cash flow, and we anticipate our business performance to continue strengthening through fiscal 2026. Micron's technology leadership, differentiated product portfolio, and strong operational execution position us as an essential AI enabler, and we are investing to support our customers' growing need for memory and storage," he said in the Q1 FY26 press release."

"Micron's revenue has been accelerating in recent quarters and surged by 56% year-over-year in Q1 FY26. This under-the-radar AI stock is achieving higher growth rates than what we have seen from Broadcom ( NASDAQ:AVGO) and Advanced Micro Devices ( NASDAQ:AMD) in recent quarters. Micron followed up its high revenue growth with expanding profit margins. Net income almost tripled year-over-year, resulting in a 38.4% net profit margin."

"All four of Micron's key business segments - Cloud Memory Business, Core Data Center Business, Mobile and Client Business, and Automotive and Embedded Business - delivered double-digit year-over-year revenue growth and high operating margins. The lowest operating margin came from the Automotive and Embedded Unit, and that part of the business still had a 36% operating margin. Shares have more than tripled year-to-date as 2025 comes to a close."

Micron's shares have more than tripled year-to-date amid accelerating demand driven by artificial intelligence. Revenue surged 56% year-over-year in Q1 FY26, outpacing recent growth at Broadcom and AMD. Net income almost tripled year-over-year, producing a 38.4% net profit margin versus about 20% earlier in the year. Management forecasts continued strengthening through fiscal 2026 and plans investments to support growing memory and storage needs. All four business segments delivered double-digit revenue growth and strong operating margins, with the Automotive and Embedded unit the lowest at a 36% operating margin. Valuation remains low, implying potential additional upside.

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