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Micron Technology (Nasdaq: MU) is a rare bird in the investing world, a high-flying AI stock that is not overvalued.

The manufacturer of computer memory and storage chips blew away earnings estimates and reported a massive revenue increase in its fiscal fourth quarter.

• Revenue: $11.3 billion, up 47% year-over-year and 22% compared to the previous quarter. It beat estimates of $11.2 billion.
• Net income: $3.2 billion, or $2.83 per share, up 260% year-over-year and 68% from the previous quarter.
• Adjusted earnings: $3.03 per share on adjusted net income of $3.5 billion, up 194% year-over-year and 82% from the previous quarter. It beat estimates of $2.86 per share.

Micron saw massive growth in its cloud memory business unit, which produces high bandwidth chips that are built for data centers and hyperscalers. Revenue in this segment soared 221% year-over-year and 32% from the previous quarter.

Micron closed out a record-breaking fiscal year with exceptional Q4 performance, underscoring our leadership in technology, products, and operational execution,” Sanjay Mehrotra, chairman, president and CEO of Micron Technology, said. “In fiscal 2025, we achieved all-time highs across our data center business and are entering fiscal 2026 with strong momentum…”

Mehrotra added that Micron is well-positioned to capitalize on the AI opportunity ahead as the only U.S.-based memory chip manufacturer.

Robust growth outlook

Micron does not expect growth to slow down as it projects $12.5 billion in revenue in its fiscal Q1, which is 11% higher than the last quarter.

Gross margin is pegged at 50.1% for Q1, up from 44.7% last quarter, while operating expenses are anticipated to increase by 6% to $1.49 billion, which is slower than the pace of revenue growth.

Earnings are targeted to hit $3.56 per share, up from $2.83 per share in Q4. Adjusted earnings are projected to reach $3.75 per share, up from $3.03 per share last quarter. That would be a 24% increase.  

We definitely continue to see strong long-term growth and are very excited about all these various announcements of massive data center infrastructure spend. We have talked about trillions of dollars of spend over the next several years, and memory is very much at the heart of this AI revolution. This means a tremendous opportunity…” Mehrotra said.

Analysts are impressed

Investors may not have been all that impressed with the results, but Wall Street analysts were. Micron stock got a slew of price target upgrades, about 17 of them by the last count.

Among the most notable, Wedbush, JP Morgan and Wells Fargo raised their targets for Micron to $220 per share, while Rosenblatt increased it to $250.

If Micron stock hit $220, it would be a 37% increase over its current $160 per share price.

As mentioned, Micron is the rare undervalued AI stock, with a P/E ratio of 21 and a forward P/E of only 12. It is not clear what caused the selloff, maybe profit-taking, but what is clear is that Micron stock still looks like a great value, especially on this dip.

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