Is Micron Technology Still a Smart Bet After a 130% Surge in 2025?

• Curious if Micron Technology’s stock is priced right, or if there’s untapped value waiting to be unlocked? You’re not alone; investors everywhere are asking the same question about this semiconductor giant.
• Micron’s market ride has been anything but dull, with shares up an impressive 130.6% year-to-date, even after a sharp 15.0% dip over the last week.
• Recent headlines about surging AI-related chip demand, along with a high-profile expansion of Micron’s advanced memory production capacity, have fueled bullish sentiment for much of the year. However, fresh concerns around potential supply bottlenecks and industry shifts have also weighed on the stock in recent days.
• When we run Micron through our valuation checks, it earns a score of 3/6, suggesting the picture isn’t purely black and white. In this article, we’ll break down those valuation approaches and touch on a better way to think about value that’s often overlooked.

Micron Technology delivered 96.8% returns over the last year. See how this stacks up to the rest of the Semiconductor industry.

Approach 1: Micron Technology Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model works by projecting a company’s future cash flows and then discounting them back to today’s value. This approach is designed to estimate what a business is really worth, rather than simply relying on market sentiment at any given moment.

For Micron Technology, the current Free Cash Flow stands at $2.22 Billion. Analyst forecasts point to robust growth, with free cash flows projected to reach $8.56 Billion by 2026 and as high as $10.60 Billion by 2030, according to extrapolated figures from Simply Wall St. While analyst projections typically cover five years, longer-term numbers are estimated based on trends and available growth data.

After running these cash flow projections through the DCF model, Micron’s estimated intrinsic value comes out to $102.30 per share. However, this figure is 96.9% lower than the company’s current share price, indicating that the market values Micron much higher than its DCF-calculated fundamentals support.

In summary, the DCF model implies Micron Technology is significantly overvalued based on current and projected cash flows.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Micron Technology may be overvalued by 96.9%. Discover 921 undervalued stocks or create your own screener to find better value opportunities.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Micron Technology.

Approach 2: Micron Technology Price vs Earnings (PE Ratio)

The Price-to-Earnings (PE) ratio is one of the most widely used valuation tools for profitable companies like Micron Technology because it directly connects a company's market price to its underlying earnings. This makes the PE ratio especially valuable for investors seeking an accessible measure of value grounded in actual company performance.

Determining what counts as a "fair" PE ratio involves more than just picking a number that looks good. Growth expectations and perceived risk are major influencers. Rapidly growing or less risky companies can generally command higher PE ratios, while slower growth or greater uncertainty often push the ratio lower. Benchmarks help as well; Micron’s current PE ratio stands at 26.5x, compared to an industry average of 32.8x and a peer group average of 83.8x, highlighting that it is priced below both broad benchmarks.

Simply Wall St’s "Fair Ratio" offers a tailored approach, factoring in Micron’s growth outlook, profit margins, industry context, company-specific risks, and market capitalization. Unlike basic peer or industry comparisons, this metric is designed to reflect what the market should reasonably pay for Micron given its unique circumstances. For Micron Technology, the Fair Ratio is calculated at 43.0x. Since this is meaningfully higher than the current 26.5x PE, the stock appears undervalued on this measure.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1423 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Micron Technology Narrative

Earlier we mentioned there is an even better way to assess valuation, so let’s introduce you to Narratives. A Narrative is simply your story or perspective about a company, connecting your assumptions about future revenues, earnings, and profit margins to an estimate of fair value. This approach goes beyond static numbers, helping you link what you believe about a business, such as Micron’s future AI leadership or its risks from competition, directly to a detailed financial forecast and an actionable fair value.

Narratives are designed to be easy and accessible for all investors, and on Simply Wall St’s platform you can explore them within the Community page. Millions of investors already use Narratives to compare their fair value to the current share price and decide when to buy or sell, making the decision-making process more transparent and personalized.

One of the biggest strengths of Narratives is that they update automatically as new information, such as news or earnings reports, becomes available. This ensures your story always reflects the latest facts. For example, some investors estimate Micron’s fair value as high as $213 based on aggressive growth and margin expansion, while others are much more cautious, placing fair value as low as $95. This demonstrates how Narratives empower you to invest with conviction based on your own informed view.

Do you think there's more to the story for Micron Technology? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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