Micron Technology (NASDAQ:MU) has delivered a stunning start to 2026. The memory giant’s stock has surged 44% year-to-date, reaching $417.88 as of midday trading. That’s part of a 323% one-year rally that has investors asking: what’s fueling this run, and can it continue?
Earnings Beat Momentum Continues
Micron’s most recent quarter showed exactly why the stock is on fire. The company reported $4.78 in earnings per share for Q1 fiscal 2026, crushing estimates of $3.94. That’s a 21.32% beat. Micron has beaten analyst expectations in all four quarters of fiscal 2025, with three beats exceeding 20%.
CEO Sanjay Mehrotra captured the momentum: “Micron had an outstanding finish to fiscal 2025, delivering fiscal Q4 revenue, gross margin, and EPS all above the high end of our updated guidance ranges, driven by pricing execution and strong performance across end markets.”
Revenue hit $37.4 billion for fiscal 2025, up 48.8% year-over-year. Gross margins expanded 17.4 percentage points to 39.8%, and net income exploded 997% to $8.539 billion.
HBM Supply Shortage Creates Pricing Power
The real story is high-bandwidth memory. Micron’s HBM revenue reached nearly $2 billion in Q4, putting it on an $8 billion annualized run rate. That’s up from virtually nothing a year ago.
The supply-demand imbalance is severe. Goldman Sachs identified a “great memory crunch” that isn’t expected to ease until at least 2028. That’s giving Micron extraordinary pricing power. The company has already locked in pricing agreements with almost all customers for the vast majority of HBM3e supply in calendar 2026.
Wall Street expects Micron’s revenue to surge to $75.9 billion this year.
On HBM4, Micron is flexing its technical leadership. The company recently shipped samples with bandwidth exceeding 2.8 terabytes per second and pin speeds over 11 gigabits per second. Mehrotra stated: “We believe Micron’s HBM4 outperforms all competing HBM four products, delivering industry-leading performance as well as best-in-class power efficiency.”
Analyst Targets Climbing Fast
Wall Street is racing to catch up. Morgan Stanley raised its price target to $450 from $350 on February 11, citing ongoing DRAM price increases and supply shortages. UBS went to $450 from $400, while Mizuho pushed to $480. Phillip Securities initiated coverage with a $500 price target.
The consensus among 43 analysts shows 10 Strong Buy ratings and 27 Buy ratings, with only 6 Hold or Sell ratings.
What’s Next for 2026
Micron’s guidance for Q2 fiscal 2026 calls for revenue of $18.7 billion, which would be another quarterly record. Gross margins are expected to hit 67%, with adjusted earnings per share of $8.42.
The next earnings report is scheduled for March 26, 2026, which is 43 days away. Investors will be watching three things: HBM production ramp pace, DRAM pricing sustainability, and whether AI server demand continues broadening beyond hyperscalers into traditional enterprise workloads.
However, if you’re looking for alternatives in the memory space, one suggestion is to look at the companies that supply HBM manufacturers like Micron. Camtek (Nasdaq: CAMT) creates critical inspection and metrology equipment for both HBM and advanced packaging. Wall Street is estimating only around 5% revenue growth in 2026, which means the company could exceed targets that don’t bake in significant growth despite its position in high growth industries.
An even smaller ‘play’ on the growth of HBM is Cohu (Nasdaq: COHU), another company in the test and metrology space. Cohu reports earnings after the bell today. If it forecasts strong growth throughout 2026, it could become a popular ‘play’ for investors focused on the growth of HBM.
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