Few stocks are as exciting as Micron Technology (MU 3.75%) right now. With shares reaching all-time highs and trading up 787% over the past year, the debate over the memory company's valuation is dividing analysts. Bulls and bears are coming to very different conclusions.
So is Micron too expensive, or is there still more room to run?
Image source: The Motley Fool.
Micron does have some metrics that could raise valuation red flags. The stock's trailing P/E ratio has risen steadily from last year and now stands at about 35 (the five-year average is 28.5). Bears might also point out that the memory chip market tends to be cyclical, and investors shouldn't forget the pain a boom-bust cycle can cause.
However, there are signs that the typical cyclical pattern may not hold in the new era of artificial intelligence (AI). Also, forward-looking metrics are providing a narrative that Micron is still undervalued. The company's forward P/E is just 7.6, and its PEG ratio is 0.26, which indicates the stock is priced to buy.
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Key Data Points
By comparison, industry rivals such as Sandisk have far higher P/E ratios. The reason Micron still looks cheap is that it is smashing estimates. Revenue nearly tripled year over year, jumping from $8 billion in Q2 2025 to $23.8 billion in 2026.
AI requires high-bandwidth memory (HBM), and Micron is one of just a few companies that can supply it. Micron's entire 2026 supply is sold out, and that trend looks set to continue well beyond this calendar year.
By its own historical measures, Micron isn't inexpensive. However, the company is in the midst of a supercycle, according to its management.
So yes, Micron is still reasonably priced, provided the AI infrastructure build-out continues.
