Micron's stock is an S&P 500 standout by this metric, as memory prices boom

By Britney Nguyen

Looking across the S&P 500 at unreported fiscal years, no company is expected to grow revenue faster than Micron

Micron's stock was down more than 1% on Monday but still is off to a strong start this year thanks to its Friday surge.

Prices for memory chips continue to boom, and that makes Micron a standout in the S&P 500.

No company in the index has higher projected revenue growth for its unreported fiscal year, according to Dow Jones Market Data. The FactSet consensus for Micron calls for 93% top-line growth in fiscal 2026, which ends in August.

Despite that upbeat projection, and the fact that the stock rose 239% in 2025 to rank among the index's biggest gainers, Micron's stock (MU) is also fairly cheap relative to other S&P 500 SPX components. Its forward price-to-earnings multiple of 9.2 ranks as the 24th lowest within the S&P 500, based on FactSet data.

More from MarketWatch: Intel's stock is so cheap compared to TSMC's - and this analyst now says 'buy'

The stock is off to a strong start in 2026, up 9% so far this year even with a small Monday pullback. That year-to-date performance was fueled by Friday's 10% rally, which Baird managing director Ted Mortonson said reflected optimistic commentary from Micron and fellow memory players Samsung Electronics (KR:005930) and SK Hynix (KR:000660). The companies are seeing rising prices as demand outstrips supply, Mortonson told MarketWatch in emailed comments.

South Korean-listed shares of Samsung and SK Hynix were up on Monday after reports said that the companies were looking to raise prices for dynamic random-access memory by up to 70% in the current quarter. While the price hikes are focused on server DRAM, similar price increases could hit personal-computer and smartphone makers as well, and "that sure sounds good if you are long memory stocks," Mizuho desk-based analyst Jordan Klein said in a note Monday.

He pointed to Micron as another beneficiary of that momentum, as well as semiconductor-equipment suppliers exposed to the memory market, such as Applied Materials (AMAT) and Lam Research (LRCX).

Don't miss: This could be a better - and safer - way into the AI trade in 2026

Cantor Fitzgerald analyst C.J. Muse said in a December note that ongoing supply constraints for DRAM and other memory components should contribute to another outperformance by the PHLX Semiconductor Sector SOX in 2026. His top pick among DRAM players for the year was Micron.

Muse said he favored Micron "given [a] clear path" to earnings of more than $30 a share in 2026. The FactSet consensus is for $31.49 in adjusted earnings per share this fiscal year.

The demand for AI chips is driving the need for memory components, and because the memory market is cyclical, suppliers including Micron have been hesitant to add more capacity. That tightness in demand has allowed memory-chip makers to raise prices.

See more: Micron just had its Nvidia moment. What comes next for the stock?

Klein added that Samsung and SK Hynix are reportedly working on three-month price agreements with customers rather than long-term commitments, which shows that price increases are expected in future quarters.

Samsung is due to report its fourth-quarter results on Thursday. That will likely be an event worth watching for investors in memory stocks.

-Britney Nguyen

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

01-05-26 1549ET