During the September 18 episode of Mad Money, a caller asked whether to lock in gains on Micron Technology, Inc. (NASDAQ:MU) after holding the stock since 2014, noting that it recently crossed $1,000 and is preparing to report earnings at the end of the month. Jim Cramer replied:
No… I don’t. I don’t… And the reason I say this is it sells at 13 times earnings, maybe six times next year’s earnings. I care about PE multiples and this is one incredibly cheap stock, which is why we have a giant position for it for the Charitable Trust.
The bullish view comes even as some prominent investors moved the other way. We recently examined why Stanley Druckenmiller exited Micron despite the strengthening AI-memory cycle.
Wall Street Bullishness And Agentic AI Tailwinds Support Multiple Expansion
Wall Street analysts highlight significant room for multiple expansion as artificial intelligence workloads evolve toward sophisticated agentic models that require massive memory footprints. Recent research from RBC Capital, posted by The Fly on September 18, points out that demand trends continue to outstrip industry supply, with production constrained by structural challenges related to high-bandwidth memory manufacturing, limited clean room space, and extreme ultraviolet lithography bottlenecks. RBC Capital maintained an Outperform rating along with a $1,500 price target. The firm noted that, trading at roughly 6.5 times projected forward earnings, Micron Technology, Inc. is receiving little valuation credit for the safety net provided by the company’s strategic customer agreements and price floor commitments.
Furthermore, advanced product integration and multi-generation roadmaps provide powerful structural tailwinds. The company has secured deep engineering alignments with industry leaders, integrating its high memory solutions directly into upcoming accelerated computing architectures.
Capital Expenditure Intensity And Cyclical Supply Risks Threaten Margins
Despite technological leadership, Micron Technology, Inc. operates within an inherently capital-intensive environment that remains susceptible to cyclical corrections and heavy capital expenditure burdens. Building out greenfield fabrication plants and scaling advanced manufacturing nodes require massive upfront investments, with annual capital expenditures running near record levels. If broader artificial intelligence infrastructure buildouts experience a temporary pause or if enterprise cloud providers moderate their deployment velocity, the company could face severe margin compression from high fixed costs.
Institutional Accumulation Accelerates As Short Interest Remains Low
Institutional asset managers tracked by Insider Monkey display growing conviction toward Micron Technology, Inc., highlighting strong confidence in the company’s multi-year growth trajectory. According to Insider Monkey database metrics, 184 hedge funds held positions in the company at the close of the second quarter, representing an increase from 154 funds in the prior quarter. Meanwhile, short seller activity continued to be low, with short interest as a percentage of float standing at 2.64%. The combination of expanding institutional accumulation, low short interest, and attractive forward valuation multiples reinforces the broader bullish thesis heading into the impending fiscal earnings report.
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