Technology stocks have experienced significant volatility over the past six months. The recent swings can be attributed to multiple factors, including the ongoing conflict in the Middle East, concerns about the valuations of artificial intelligence (AI) companies, and the viability of the massive spending on AI infrastructure.
Simply said, the recent weakness in AI stocks has been a headwind for the tech sector. The good news is that AI giants such as Nvidia, Oracle, Broadcom, and Palantir have reported impressive growth and strong outlooks in their latest quarters. And as we approach the end of the ongoing earnings season, it won't be surprising to see Micron Technology (MU 1.27%) following suit on Wednesday, March 18.
Let's look at the reasons why Micron's upcoming earnings report could be better than expected.
Image source: Micron Technology.
Robust memory demand and pricing put Micron in a solid position going into the quarterly report
Micron Technology manufactures memory and storage chips used in multiple applications, including data centers, cloud computing, mobile devices, vehicles, personal computers, and the Internet of Things. So, Micron's results can be considered a barometer of how these markets are performing.
NASDAQ: MU
Key Data Points
As such, the market will be eagerly awaiting Micron's fiscal 2026 second-quarter results on March 18, especially given that it benefits big-time from the proliferation of AI. Micron's cloud memory business unit (CMBU), which accounts for sales of memory solutions to hyperscalers and high-bandwidth memory (HBM), is its biggest segment.
CMBU accounted for 39% of Micron's top line in fiscal Q1 (which ended on Nov. 27, 2025), up from 30% a year ago. The segment's revenue doubled year over year during the quarter to $5.3 billion, primarily due to higher average selling prices (ASP) and stronger shipments for AI data centers. The good news for Micron investors is that the favorable trends driving the company's robust growth have persisted.
According to Counterpoint Research, the prices of both DRAM and NAND flash memory chips jumped by 90% in the first quarter of 2026 compared with the preceding quarter. The research firm expects the price rise to continue in the second quarter. There is a strong possibility that the price rise will continue well into 2027 due to the strong demand from AI data centers.
After all, the HBM that Micron manufactures is a critical component in AI chip systems due to its ability to move huge amounts of data quickly while keeping power consumption in check. The recent results from major chip companies such as Nvidia and Broadcom, which deploy HBM in their chips, suggest that AI chip demand isn't slowing down.
While Nvidia's growth is likely to accelerate this fiscal year, Broadcom's AI outlook for next year points toward a fivefold increase in revenue over the previous year.
Micron's stock is a no-brainer buy going into earnings
Analysts are forecasting a 138% spike in Micron's revenue for the recently concluded quarter to $19.2 billion, along with a 5.5x jump in earnings to $8.65 per share. The estimates are slightly higher than Micron's guidance of $8.42 per share in earnings on $18.7 billion in revenue.
However, the sharp jump in memory prices and persistently strong demand from AI data centers should ideally help Micron exceed expectations. As such, don't be surprised to see this AI stock get a shot in the arm and jump higher following the 49% gains it has clocked in 2026. Finally, with Micron trading at 13 times forward earnings, it is a no-brainer buy right now given how fast it is growing.
