Up 30% in September—can Micron still be chased higher?

Micron earnings summary:

• Fiscal Q4 beat across the board, with standout gross margin performance expected to persist into 2026.

• Strength driven primarily by DRAM: revenue $8.98B, up 27% YoY.

• DRAM ASPs saw low double-digit QoQ gains; NAND ASPs saw high single-digit QoQ gains.

• Q1 guidance far above consensus, driven by ongoing improvements in pricing, cost, and product mix.

• The company raised FY EPS outlook and increased capex plans to expand DRAM capacity.

How to assess:

• Micron is in a powerful AI-driven upcycle.

• Management expects the DRAM market to become “even tighter” in calendar 2026.

• Tight supply should further support pricing and profitability.

• At $170, on a traditional memory valuation basis, MU is approaching peak multiples.

• On a 2.6x projected calendar-2026 P/B framework, fair value computes to about $180.

Options analysis:

• Expected MU trading range for October: $140–$170.

• Put interest clusters around $145–$150, creating strong support.

• Call interest clusters around $165–$170, creating strong resistance.

• Current IV is 51.70%, indicating the market is pricing October volatility slightly above recent realized.

Trading strategies:

• With growth momentum likely to continue, consider a conservative bullish stance via short OTM puts.

• If you hold MU shares, consider selling OTM covered calls to harvest near-term carry.

Strike/expiration references:

• Covered call: $MU 20251003 170.0 CALL$  (win rate 89%)

• Short put: $MU 20251003 146.0 PUT$  (win rate 80%)