After a stellar performance over the past year, fueled by the artificial intelligence (AI) boom, leading semiconductor giant Micron Technology (MU) is diving even deeper into this trend and investors are paying close attention. On April 8, Micron shares rose 7.72% after the company announced a strategic investment in SiMa.ai, a rapidly growing company in the field of Physical AI.
The goal is to accelerate the production of advanced AI solutions designed for real-world use cases such as robotics, autonomous systems, and industrial automation. This collaboration combines SiMa.ai’s powerful Modalix MLSoC architecture with Micron’s LPDDR5X memory, delivering faster performance, higher bandwidth and lower power consumption. These advantages are critical for efficiently running complex workloads such as Large Language Modeling (LLM) and Visual Language Modeling (VLM) at the edge.
SiMa.ai has launched System-on-Modules powered by Micron memory, signaling early commercialization and real market traction. With this investment, Micron is expanding beyond its traditional memory business and strengthening its position in the rapidly growing physical AI space, opening a new path for long-term growth. With this latest development, is MU stock worth buying right now?
Headquartered in Idaho, Micron Technology is a key force in the global semiconductor industry and known for its innovative memory and storage solutions. As one of the world’s largest chip manufacturers, the company focuses on the DRAM and NAND technologies that underpin modern computer systems. In recent years, Micron has increased its strategic focus on the enterprise and data center markets, moving away from the consumer-facing Crucial brand to focus on higher growth opportunities tied to AI infrastructure.
With advanced High Bandwidth Memory (HBM) and energy-efficient server solutions, Micron is effectively providing the critical backbone for large language models (LLMs), positioning itself to capitalize on the accelerating wave of global AI investment. Currently boasting a market capitalization of approximately $474.3 billion, Micron is enjoying a strong run on Wall Street, with the company’s stock delivering impressive gains. And it’s not just the recent investment in SiMa.ai that is driving momentum.
A wave of analyst optimism has bolstered confidence in Micron’s AI-driven growth story, while improving macro sentiment, especially with the ceasefire in the Middle East. It has sparked a broader wave of “risk-taking” across the semiconductor sector. Together, these tailwinds are amplifying investor optimism and helping to fuel Micron’s continued growth.
After posting a staggering 500.4% gain over the past year, Micron has continued that momentum through 2026, with shares up another 47.36% year-to-date (YTD). By comparison, the broader S&P 500 ($SPX) index rose 29.4% last year and is down slightly year-to-date, making Micron’s outperformance all the more striking. Micron hit a record high of $471.34 on March 18, and even after a modest pullback, shares are still hovering just 10.8% below their peak, highlighting the strength of the ongoing AI-fueled rally.
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Micron’s second-quarter fiscal 2026 earnings report, released on March 18, was nothing short of historic, characterized by triple-digit growth that effectively crushed Wall Street expectations. The company broke records for revenue, gross margin, EPS and free cash flow, driven by strong demand, tight industry supply and impeccable execution. For the quarter, Micron reported record revenue of $23.86 billion, up a staggering 196.4% year-over-year (YOY) and up 75% quarter-over-quarter.
Of course, that remarkable revenue number beat Wall Street’s expectations of $19.61 billion. The power is across the board. Quarterly revenue nearly tripled from a year ago, with DRAM, NAND, HBM and every business unit hitting record highs. DRAM leads with revenue of 18.8 billion USD, skyrocketing 207% over the same period and accounting for 79% of total revenue. NAND is not far behind, generating about $5 billion, up 169% annually.
This strong revenue growth led to even higher profits as Micron’s shift into high-margin AI products paid off in a big way. In summary, Micron posted adjusted EPS of $12.20, a jump of 682% YoY, crushing expectations of $8.80. Gross margin more than doubled to 74.4%, from 36.8% a year ago, highlighting tight supply conditions and the company’s ability to command premium prices for its advanced memory products.
Cash generation remains equally impressive. During the quarter, Micron invested about $5 billion in capital expenditures while delivering $6.9 billion in adjusted free cash flow. The company ended the quarter with $16.7 billion in cash, marketable investments and limited cash, along with $20.2 billion in total liquidity, underscoring its strong financial position. Looking ahead, the upward momentum shows no signs of slowing down.
For fiscal Q3 2026, Micron expects revenue of $33.5 billion, plus or minus $750 million, with gross margin expected to increase further to 81%. Non-GAAP EPS is forecast between $18.75 and $19.55. To meet growing demand, the company now plans to increase capital expenditures for fiscal 2026 to over $25 billion, including approximately $7 billion in the third quarter alone, while still generating significantly higher free cash flow thanks to stronger operating cash flow.
Wall Street’s confidence in Micron is growing stronger. On April 8, UBS raised its price target to $535 from $510 while maintaining a “Buy” rating, citing improving price trends across both DRAM and NAND, especially in HBM, where demand remains hot. Industry checks indicate active negotiations with hyperscalers and OEMs, involving long-term deals, volume commitments, upfront payments and structured pricing.
Notably, major companies such as Micron, SK Hynix and Samsung are looking to rebuild premium HBM pricing through 2027, signaling confidence in sustained demand and higher margins going forward. Additionally, UBS is much more optimistic than the broader Street, forecasting Micron’s EPS to reach about $135 in 2027 and $120 in 2028, well above consensus estimates. The company believes that memory companies are prioritizing the long-term vision over short-term gains, reinforcing the durability of the current bull cycle.
With potential supply shortages, especially of DRAM, extending into 2028, the setup remains favorable for continued pricing strength. Meanwhile, analysts at BofA Securities see the AI infrastructure boom entering a more stable and scalable phase, with global investment expected to nearly triple to $1.4 trillion by 2030. They highlight steady capital expenditure intensity of 25% to 30% as hyperscalers and governments upgrade systems for AI workloads. In this environment, Micron stands out as the main beneficiary, especially HBM, which is crucial for AI chips.
Overall, Wall Street’s confidence in Micron remains extremely strong, with the stock earning a “Strong Buy” consensus rating. Of the 41 analysts, 30 prevail firmly with a “Strong Buy” recommendation, while another 6 are more positive with a “Moderate Buy” and only 5 remain cautious with a “Hold” rating, highlighting how sentiment clearly leans towards Micron. The opposite case is equally attractive.
The average price target of $493.24 implies a healthy 17.27% upside from here, while the Street High target of $750 suggests a whopping 78.3% upside. To investors, that signals that despite its impressive performance, Micron may still have plenty of fuel left in the tank.
On the date of publication, Anushka Mukherji had no position (direct or indirect) in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. This article was originally published on Barchart.com
