Micron Stock Slips Despite Record Q4, Analyst Price Hikes. Here’s Why MU Stock Is Still a Buy
Micron just posted a record quarter, analysts are raising price targets, and the stock still fell. The reason why reveals a deeper tension about where memory markets are actually headed.
Micron Technology (NASDAQ:MU | MU Price Prediction) stock fell 1.72% to $1,046.79 despite record fiscal Q4 results and analyst price target increases. Goldman Sachs (NYSE:GS) raised its target to $1,250 from $1,100, Mizuho (NYSE:MFG) to $1,400, and Rosenblatt to $1,900, while Morningstar (NASDAQ:MORN) cut its fair value to $700 from $850. Wall Street disagrees on cycle duration, but bulls have more evidence on their side.
Analysts’ Case: Memory Supply Stays Tight Through 2028
Goldman’s price target increase came as the CEO said memory supply should stay tight through 2028. Q4 revenue reached $54.2 billion, up 31% sequentially and 379% year over year, making it the sixth consecutive record quarter. Non-GAAP EPS of $33.42 beat consensus of $31.35, and gross margin reached 87%, up 210 basis points sequentially.
More than 75% of 2027 output is committed. 26 strategic customer agreements cover over 35% of revenue through 2030, with some extending into 2031. Remaining performance obligations total about $150 billion. CFO Mark Murphy said, “Even at floor prices, we expect margins meaningfully above any prior cycle peak margins.”
Company Snapshot: A Record Year Built on AI
Micron makes DRAM and NAND memory. Fiscal 2026 revenue rose 256% to $133.2 billion, and EPS came in at $75.52. Q4 Data Center SSD revenue was nearly $10 billion. Most calendar 2027 HBM supply has been sold at higher prices. Fiscal Q1 guidance: revenue of $61.5 billion ± $1.5 billion, gross margin of about 86.25%, and EPS of $38.15 ± $1.00.
Why the Move Matters Now
Higher prices drove most of Q4’s gains. DRAM revenue rose 27% while bit shipments grew only in the mid single digits. NAND revenue climbed 42% on price increases of about 30%. Investors are pricing this as a peak that fades once supply catches up.
Management argues catch-up is a long way off. Significant new cleanroom capacity does not arrive until late calendar 2028, and gross margins are expected to rise after Q1. Real risks remain: first-half fiscal 2027 capex is about $25 billion, startup costs are climbing, and Netlist has filed an ITC complaint seeking a ban on Micron’s HBM imports. Yet shares trade at about 7 times forward earnings.
What It Means for Your Portfolio
If Micron maintains forward EPS of around $200 and the market applies 10x instead of 6x, that points to a $2,000 stock. Starting December 9, 2026, Micron plans to return 100% of excess cash to shareholders and pays a $0.15 quarterly dividend. With a beta of 2.222, expect sharp moves. Watch whether Q1 margins hold, how many new SCAs are signed, and the next buyback authorization size.
Contact [email protected] for any questions or corrections.
After two decades of patrolling the dark corners of suburbia as a police officer, Rich Duprey hung up his badge and gun to begin writing full time about stocks and investing. For the past 20 years, he’s been cruising the markets looking for companies to lock up as long-term holdings in a portfolio while writing extensively on the broad sectors of consumer goods, technology, and industrials. Because his experience isn’t from the typical financial analyst track, Rich is able to break down complex topics into understandable and useful action points for the average investor. His writings have appeared on The Motley Fool, InvestorPlace, Yahoo! Finance, Money Morning, and, of course, 24/7 Wall St. He has been featured in both U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, and USA Today.
