Is MU a good stock to buy? We came across a bullish thesis on Micron Technology, Inc. on Beyond the Noise’s Substack by Cristobal Botanch. In this article, we will summarize the bulls’ thesis on MU. Micron Technology, Inc.’s share was trading at $864.01 as of June 5th. MU’s trailing and forward P/E were 40.77 and 8.78 respectively according to Yahoo Finance.
Micron Technology, Inc. designs, develops, manufactures, and sells memory and storage products in the United States and internationally. MU is emerging as a re-rated AI memory leader as consensus underestimates its transformation into the key supplier of DRAM, NAND, and HBM, the bottleneck for AI compute capacity. In Q2 FY2026, it delivered $23.86B revenue (+196% YoY), 74.9% gross margin, $12.20 EPS, and $6.9B FCF, guiding Q3 to $33.5B revenue, ~81% margin, and ~$19.15 EPS. Balance sheet shifted to $6.5B net cash with $20.2B liquidity.
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Three convexities reinforce: operational margins toward ~81% driven by HBM mix, financial FCF surge funding capacity, and valuation rerating as Q1–Q3 EPS totals $36.13 vs $32.27 consensus, implying $60+ FY2026 EPS and ~7.6x true P/E vs 14.3x headline. Market still anchors to outdated consensus despite two beats. Catalysts: Q3 FY2026 earnings and HBM4/HBM4E ramp into NVIDIA Vera Rubin, expanding TAM and pricing power.
Risks include China export restrictions, Q4 margin plateau, and long-term DRAM capacity additions from Samsung and SK Hynix. Overall, Micron is a compounding loop where AI demand, margin expansion, and reinvestment reinforce each other, driving rerating and upside as consensus converges. Free cash flow acceleration from near-zero levels in FY2024 underscores the inflection in profitability and reinvestment capacity.
HBM leadership tied to NVIDIA and hyperscaler demand strengthens pricing power across cycles. Management highlights that mix shift toward data center SSDs and HBM is structurally lifting margins beyond legacy DRAM cycles. This positions Micron for a re-rating as sell-side models converge toward revised FY2026 earnings exceeding $60 per share, unlocking significant upside on consensus revision into FY2026 outlook.
Previously, we covered a bullish thesis on Micron Technology, Inc. (MU) by Oliver | MMMT Wealth in April 2025, which highlighted AI-driven memory demand, strong revenue and EBITDA growth, and a valuation discount to historical multiples. MU’s stock price has appreciated by approximately 1130% since our coverage. Cristobal Botanch shares a similar view but emphasizes margin expansion, FCF acceleration, and valuation rerating driven by HBM leadership and consensus EPS revision above $60.
Micron Technology, Inc. is on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 154 hedge fund portfolios held MU at the end of the first quarter which was 137 in the previous quarter. While we acknowledge the risk and potential of MU as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MU and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
