Why Investors Should Be Cautious of Micron’s Momentum

On the June 29, 2026, episode of The Morning Filter podcast, hosts Susan Dziubinski and Morningstar Chief US Market Strategist Dave Sekera break down Morningstar’s take on Micron’s MU latest earnings report. Here’s an excerpt from the episode.

Micron Stock’s Outstanding Results

Susan Dziubinski: Well, let’s pivot over to some new research from Morningstar. Micron reported pretty outstanding results last week. What’s Morningstar’s take?

David Sekera: The results that they’re posting are just crazy when you look at these numbers. I mean, their revenue was up almost 350% on a year-over-year basis. Their gross margins expanded. They were coming in at 85%. Comparatively, that was only 39% a year ago. Again, it’s one of these situations where there is just so much demand and not enough supply. They can charge whatever price they want to charge, and people are paying for it. It appears that’s what we’re going to see here going forward. The growth guidance that they gave implies more growth, more margin expansion. The longer-term outlook, though, is still the same. What happens here is we’re still trying to figure out just how much more growth can increase for the second half of this year and into 2027, but we still think that by 2028, new capacity is going to come online. As that new supply comes online, that’s going to put pressure on pricing and put pressure on margins, so those will come down in 2028 and thereafter.

In the meantime, we did increase our 2027 results pretty substantially and brought up our expectations for the second half of this year as well. That led to a pretty substantial increase in our fair value. Even after we boosted our fair value, it still trades at a 33% premium. It’s enough to put it in 2-star territory. As far as the stock price goes, this is one where there’s so much momentum. We’re still looking for growth in the results over the next couple of quarters. That could still push the stock price even higher and further above that new fair value increase, but this is one I’m going to caution investors about. Once this stock cracks for whatever reason, this is one that, once it starts to fall, I think it gaps down pretty quickly.

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