Micron Technology (MU.US) is scheduled to announce its fiscal 2026 second-quarter earnings after the U.S. market closes on Wednesday, March 18 (Eastern Time), which corresponds to the morning of March 19, Beijing time. Wall Street analysts widely anticipate that the company's revenue for the quarter will surpass $19.1 billion, with earnings per share (EPS) expected to approach $8.56, driven by continued strong growth in demand for high-bandwidth memory (HBM).
Ahead of the earnings release, a financial analyst has reaffirmed a "Strong Buy" rating on the company. The analyst noted that their previous bullish outlook for Micron by the end of 2025 has been well validated, as the stock has risen more than 40% since then, while the broader market has declined. Micron has been absorbing various positive catalysts over the past months, and another is imminent. The analyst referred to the upcoming fiscal Q2 2026 earnings report, which is highly likely to be strong. Importantly, despite rapidly strengthening fundamentals, the stock price growth has lagged behind the upward revisions in EPS estimates. This suggests Micron's valuation multiples remain low, while market confidence in its strong growth potential is high, supported by various structural tailwinds.
According to the earnings preview and recent developments, Micron's upcoming report on March 18 follows eleven consecutive quarters of earnings exceeding market expectations. With such a strong track record, it is no surprise that Wall Street analysts are optimistic about its prospects—over the past 90 days, EPS estimates for Micron have been raised 23 times, with no downward revisions. The company has demonstrated accelerating revenue growth, with year-over-year growth rates climbing from 36.6% to 56.7% over the past three quarters. For fiscal Q2 2026, Wall Street analysts project a significant leap in revenue growth, expecting an increase of approximately 137%. Moreover, net profit growth is forecast to substantially outpace revenue growth, with adjusted EPS anticipated to surge 452%. Notably, the projected EPS of $1.61 for fiscal Q2 2026 exceeds the full-year adjusted EPS of $1.29 for fiscal 2025. This is not just a one-time peak; Micron is predicted to maintain an average year-over-year revenue growth rate exceeding 100% over the next four quarters. Meanwhile, Wall Street expects its average EPS growth rate to reach 332% during the same period, significantly higher than the projected revenue growth. Given Micron's history of substantial earnings beats, the company is well-positioned to achieve these aggressive forecasts.
Behind these impressive figures lies a robust growth story supported by large-scale structural tailwinds. In 2026, the global AI flywheel is accelerating, with major tech giants investing billions in data centers and governments increasing sovereign AI budgets. Micron is one of the few large suppliers of high-performance memory chips for data centers, competing with strong Asian rivals like Samsung Electronics and SK Hynix. While competition is a fundamental risk when the potential market expands slowly, this is not the case during the rapid adoption of AI. In the analyst's view, it is evident that memory prices continue to rise while demand far exceeds total supply, indicating the potential market is expanding at a remarkable pace, thereby mitigating competitive risks. As AI acceleration represents a tangible long-term trend rather than a typical cyclical upturn, the analyst believes competitive risks may remain low for the coming years.
However, Micron's management and engineering teams are not complacent; they are actively working to build a wide moat for the company. This is crucial, as a strong moat enhances resilience against sudden demand drops. Currently, Micron's EPS is growing rapidly, and R&D investment is also climbing steadily. Driven by a commitment to innovation, Micron has consistently impressed with its speed in launching cutting-edge new products. Recently, the company began sampling the industry's highest-capacity LPDRAM module—the 256GB SOCAMM2—showcasing its technical prowess. Additionally, Micron is leveraging its expertise and collaborating with other industry leaders to enhance product competitiveness. It is currently working closely with Applied Materials (AMAT.US) to develop and manufacture DRAM, HBM, and NAND solutions for AI systems. This is not their first partnership; the two companies have a long-standing technical relationship. Having an innovative partner like Applied Materials, which has a proven track record, invests billions annually in R&D, and is a key supplier to iconic semiconductor firms such as Intel (INTC.US) and Taiwan Semiconductor (TSM.US), represents another fundamental strength for Micron.
Regarding valuation updates, Micron's most striking advantage is that its profit growth and estimate revisions have far outpaced its stock price appreciation. Over the past twelve months, the stock has surged an impressive 323%, yet valuation ratios remain quite moderate. Specifically, its forward non-GAAP P/E ratio is slightly below 12x, compared to an industry average near 22x. The earnings preview indicates that Micron's EPS is projected to soar in the coming quarters, resulting in a remarkably low PEG ratio of just 0.2, six times lower than the industry average. Although AMD (AMD.US) is not a direct competitor, the analyst finds a comparison of their valuation ratios meaningful, as both are highly profitable semiconductor companies with similar market capitalizations and are popular AI investments, both currently holding "Strong Buy" ratings. Comparing Micron's valuation multiples with AMD's reveals that Micron appears significantly undervalued. AMD's forward one-year P/E ratio is nearly three times that of Micron's, though it would be inaccurate to label AMD as overvalued given its expected substantial P/E compression. Typically, such a large disparity in valuation multiples is justified only if the higher-multiple company demonstrates stronger growth and higher profitability. However, a side-by-side comparison shows that Micron exhibits superior growth rates and profitability metrics across almost all measures. Therefore, the analyst believes Micron's stock is severely undervalued ahead of its fiscal Q2 2026 earnings report. Based on Micron's full-year EPS estimate of $35.38 multiplied by the industry median forward P/E of 21.76, the price target approximates $770, well above the current stock price just over $400.
Despite the highly bullish signals from valuation ratios, two factors suggest some risk. First, Wall Street analysts see limited upside, as their average price target is only slightly above the current stock price. Second, despite low valuation multiples and surging EPS, insiders have been actively selling shares. Theoretically, if Micron has such significant upside potential, why would they sell? Market reaction post-earnings is difficult to predict accurately, as it can be heavily influenced by geopolitical developments and macro news on the reporting day. While Micron is highly likely to report strong fiscal Q2 2026 results and provide optimistic guidance, this does not guarantee a stock surge afterward. News such as heightened tensions involving Iran or a sharp spike in energy prices could trigger broad market panic selling, potentially dragging down Micron's stock. Finally, it is worth noting that Micron's stock has already risen over 300% in the past twelve months. Amid a highly uncertain macro environment, some investors may prefer to take profits after the earnings release.
In conclusion, the analyst remains firmly convinced that Micron Technology is a worthwhile "Strong Buy" investment ahead of the upcoming earnings report. While buying shares before an earnings release inherently carries risk—since even if the company beats expectations on both revenue and earnings and provides upbeat guidance, market reaction can be unpredictable—the fundamental case for Micron appears strong.
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