Why Micron (MU) Is Down 12.7% After Blowout AI‑Driven Record Quarter And Raised Outlook

• Micron Technology reported record fiscal first‑quarter 2026 results for the period ended November 27, 2025, with sales rising to US$13.64 billion and net income reaching US$5.24 billion, and issued guidance for second‑quarter revenue of about US$18.70 billion and diluted EPS near US$8.19, both well above prior expectations.
• Management highlighted that tight industry supply and AI‑driven demand have already locked in Micron’s entire 2026 high‑bandwidth memory output under price‑and‑volume agreements, reinforcing its role as a key supplier to AI data centers.
• We’ll now examine how Micron’s record quarter and much stronger‑than‑expected AI‑driven guidance reshape its AI memory supercycle investment narrative.

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Micron Technology Investment Narrative Recap

To own Micron today, you have to believe AI data center demand and tight memory supply can support healthy pricing before the next industry downturn. The record Q1 FY2026 beat and much stronger Q2 guidance reinforce the key near term catalyst of AI driven HBM and DRAM strength, while also amplifying the biggest risk that heavy capital spending may collide with the memory cycle’s eventual turn.

Among recent announcements, Micron’s confirmation that its entire 2026 high bandwidth memory output is fully committed under price and volume agreements stands out. This directly supports the AI supercycle thesis by offering unusual revenue visibility in an otherwise cyclical industry, but it also ties the company’s fortunes closer to AI data center spending and the risk of future supply demand imbalances.

Yet investors should also be aware that Micron’s large planned 2026 capital expenditures of about US$20.0 billion could...

Read the full narrative on Micron Technology (it's free!)

Micron Technology's narrative projects $53.6 billion revenue and $13.6 billion earnings by 2028. This requires 16.6% yearly revenue growth and about a $7.4 billion earnings increase from $6.2 billion today.

Uncover how Micron Technology's forecasts yield a $249.31 fair value, a 11% upside to its current price.

Exploring Other Perspectives

Thirty five members of the Simply Wall St Community currently estimate Micron’s fair value between about US$98.51 and US$249.31, showing how far opinions can spread. You can weigh those views against Micron’s record AI driven quarter and fully contracted 2026 HBM output to judge how the memory cycle and pricing power might shape results in the years ahead.

Explore 35 other fair value estimates on Micron Technology - why the stock might be worth as much as 11% more than the current price!

Build Your Own Micron Technology Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Micron Technology research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Micron Technology research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Micron Technology's overall financial health at a glance.

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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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