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Micron (MU) Stock: A Buy at $1,075 After the Post-Earnings Pullback

Published: October 5, 2026 | Stock Picks

The thesis

Micron just reported the best quarter in its history — record revenue up 379% year over year with 87% gross margins. The market’s response was to knock the stock 14% off its $1,255 all-time high.

At $1,075, Micron trades at roughly 6.5x forward earnings, a multiple that assumes this quarter is a peak-cycle fluke. With more than 75% of 2027 output already committed by customers and supply constrained through 2028, this sell-the-news pullback is the entry.

Business snapshot: the memory supplier AI can’t build without

Micron Technology is the largest memory-chip manufacturer in the United States and the only US-based producer of high-bandwidth memory (HBM). It makes the DRAM and NAND storage that sit inside AI servers, data centers, and virtually every device with a processor.

The moat is scale plus contracts. Memory has a reputation for brutal boom-and-bust cycles — but this time Micron’s customers are signing multi-year take-or-pay agreements that lock in volume and pricing. Its 26 strategic customer agreements cover roughly 35% of revenue through 2030, backed by $32 billion in customer financial commitments. Combined with its HBM technology position alongside Nvidia’s roadmap, this is a contracted cash machine, not a spot-market gamble.

Financials: what the numbers say

Fiscal Q4 2026 (quarter ended September 3, reported September 30) was a clean beat on every line:

• Revenue: $54.23 billion, up 379% year over year and about 6% above the ~$51.07 billion consensus. It also rose 31% sequentially.
• Adjusted EPS: $33.42 vs ~$31.61 expected — the eighth straight EPS beat. GAAP EPS was $32.87 on $37.70 billion of net income.
• Adjusted gross margin: 87.0%, up from 84.9% in Q3 and 45.7% a year ago. GAAP operating margin hit 80.7%.
• Operating cash flow: $43.97 billion; adjusted free cash flow: $33.20 billion — in a single quarter. Full fiscal 2026 free cash flow was $62.31 billion on $133.19 billion of revenue (up 256%).
• DRAM revenue: $39.8 billion (73% of sales, up 343% YoY). Data-center SSD revenue exceeded $10 billion — more than 10x the year-earlier level.
• Q1 fiscal 2027 guidance beat consensus too: revenue of $60–63 billion (midpoint $61.5B) vs ~$57 billion expected, and adjusted EPS of $37.15–$39.15 vs ~$35.40 expected.

(Related reading: Marvell (MRVL) Stock Analysis: A Buy Before the Oct 6 Investor Day and Nvidia (NVDA) Stock Analysis: Why It’s a Buy at $224)

Chart & technicals: a healthy pullback, not a breakdown

MU closed Friday at $1,074.89, down 2.05% on the day and 14.3% below its $1,255 all-time high — yet still up 274% year to date and 469% over the last year.

• 50-day moving average: ~$956; 200-day: ~$682. A golden cross in force, with price holding about 12% above the 50-day. The long-term uptrend is fully intact.
• Resistance: the recent $1,050–$1,080 breakout zone overhead, then the $1,255 all-time high. Support below: the 50-day near $956.
• RSI (14-day): 74.88 — overbought. The honest caveat: momentum is hot, and this name has a history of 10–20% air pockets.
• Volume: 26.5 million shares Friday vs a ~42 million average. This was orderly profit-taking on light volume, not panicked distribution.

Valuation: priced like a peak, built like a compounder

At $1,074.89, Micron trades at ~14.4x trailing earnings. Against consensus fiscal 2027 EPS in the $160s, the forward P/E is roughly 6.5x — against an S&P 500 near 18.5x. The FCF yield is about 5.2% on fiscal 2026’s $62.31 billion.

Yes, the cheap multiple is the market pricing peak-cycle earnings. The contract book is the rebuttal: 26 strategic agreements, $32 billion in customer commitments, 35% of revenue contracted through 2030, and most 2027 HBM supply already contracted at higher prices. Management guides supply to stay constrained through fiscal 2027 and 2028.

Wall Street keeps moving targets up: Rosenblatt raised to $1,900 (Oct 1, Buy), DA Davidson to $2,100 (Buy), Baird to $1,520 (Outperform, Sept 28), Mizuho to $1,400. The consensus target is about $1,386 with a Moderate Buy rating — roughly 29% above Friday’s close.

Catalysts & what to watch

• Fiscal Q1 2027 earnings, expected around December 23: guided to $61.5B revenue and ~$38.15 EPS. Another beat would cement the super-cycle thesis.
• CHIPS Act buyback restrictions lift in December 2026, with repurchases expected to begin in February 2027.
• HBM4 production ramp and the custom NV-HBM product for Nvidia’s next-generation GPUs.
• The $250 billion HBM campus buildout in New York and Idaho comes online next year — a decade of domestic capacity.
• Dividend: $0.15 quarterly, ex-date October 14.

Risks — honestly stated

• The peak-cycle trap is real. Memory is boom-and-bust; a 6.5x forward multiple assumes $160+ FY27 earnings won’t last. If DRAM prices normalize faster than expected, the “cheap” multiple re-rates violently and the stock overshoots downward.
• The trade is crowded. RSI 74.88, +274% YTD, and Michael Burry has reportedly increased his short bet against a popular chip giant (per TheStreet). Sharp 10–20% pullbacks are normal here — position accordingly.
• HBM share. Micron is the smallest HBM player versus SK Hynix and Samsung, both expanding capacity. Share loss in HBM would pressure the highest-margin growth line.
• Margin noise and litigation. Q1 gross-margin guidance dipped to ~86.25% on higher incentive comp and startup costs — the trigger for the selloff. And a patent fight with China’s YMTC (Munich injunctions, Micron’s appeal and countersuit) adds headline risk.

Bottom line

Micron is generating $33 billion of free cash flow per quarter, holding 87% gross margins, and has customers contractually committing to 2027–2028 volume — yet the stock trades at 6.5x forward earnings and 14% below its high because investors are reliving every memory bust in history. The contract book, the $32 billion in customer commitments, and the HBM4 ramp are why this cycle is structurally different. At $1,075, post-earnings de-risking is doing the entry timing for you.

Sources:

• https://seekingalpha.com/article/4951200-micron-technology-inc-mu-q4-2026-earnings-call-transcript
• https://www.tradingkey.com/news/earnings/262194891-tradingkey
• https://www.thestreet.com/investing/stocks/micron-stock-rosenblatt-price-target
• https://www.transcriptdaily.com/2026/10/02/micron-technology-nasdaqmu-stock-price-down-2-1-whats-next.html
• https://www.fxleaders.com/news/2026/10/02/micron-stock-forecast-record-earnings-ai-demand/
• https://www.fxleaders.com/news/2026/10/01/mu-stock-retreats-to-1050-on-margins-spending-and-supply-constraints-despite-micron-beats-quarterly-earnings-and-revenue-expectations/
• https://www.fool.com/investing/2026/10/04/micron-growth-is-surging-and-the-stock-looks-dirt/
• https://www.ad-hoc-news.de/boerse/unternehmensnachrichten/micron-s-record-quarter-can-t-stop-the-profit-taking-but-wall-street/70225429
• https://www.americanbankingnews.com/2026/10/03/micron-technology-nasdaqmu-stock-price-up-3-after-strong-earnings.html
• https://parameter.io/micron-mu-stock-climbs-modestly-despite-record-breaking-fiscal-q4-performance/
• https://investwithcolby.substack.com/p/micron-technology-mu-q4-fy2026-earnings

Auto-posted by the Bull Lounge research desk.

Not financial advice. Do your own research.

Discussion: Would you buy MU here at $1,075 — or wait for a deeper pullback toward the 50-day moving average near $956?

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