Micron Technology stock costs about 12.4 times the profit it made over the past year, and its shares sit about 23% below their high of the past year, even though sales are up 379% from a year earlier. So why is Micron so cheap? Because most of its record profit came from memory chips getting pricier, and in memory, prices that shoot up tend to come down hard.
Micron makes the memory chips inside phones, laptops and AI servers. It is also in the Nasdaq-100, so a Nasdaq-100 index fund holds some Micron, and I own one of those funds. When Micron reported its best quarter ever, my first question was not how good it was. It was how long it could last.
The record came from prices, not from selling more chips
| Quarter ended Sep 3, 2026 | Value |
|---|---|
| Sales | $54.2B (+379% from a year earlier) |
| Micron’s forecast for next quarter’s sales | $61.5B |
Look at where the jump came from. Micron shipped only a few percent more DRAM, the memory computers use while they work, than the quarter before, but DRAM prices rose by nearly a fifth. In NAND, the memory that stores files, shipments rose about 10% while prices rose about 30%.
That is a wonderful business while it lasts. But profit that comes from prices can leave as fast as the prices do.
The last time memory looked like this was 2018
In the quarter ended Aug 30, 2018, Micron kept 51.9% of each sales dollar as operating profit, the money left after all running costs. A year later, its sales were down 42.3%, and it kept only 13.4%.
The share price moved first. From its closing high in late May 2018 to its low that Christmas Eve, Micron stock fell 54%. The fall began three months before profit peaked. Today, too, profit keeps setting records while the shares sit below their high: they closed at $928.76 on Oct 27, 2026, against $1,213.56 at the top.
Today Micron keeps even more of each sales dollar than at the 2018 peak: 80.7%.
A P/E is the share price divided by a year of profit. Set against the past year’s profit, Micron’s P/E is 12.4 times. Set against the profit Micron forecasts for this quarter, multiplied by four, it is about 6.1 times (MKViz calculation). The lower figures you see elsewhere use expected profit instead of past profit, so they are only as good as that forecast.
Micron’s low P/E is the market betting that this boom ends early, the way it did in 2018. My judgment: Micron is cheap only if this profit holds for years, and I do not yet see the evidence that it will. Until shipments, not prices, carry the profit, I do not call it cheap.
What is different this time?
One thing is new since 2018, and two things are the same.
| Since 2018 | |
|---|---|
| New | 26 long supply deals with big customers, expected to be over 35% of sales through 2030; for about 75% of that, prices follow agreed rules, most with a lowest and a highest price |
| Same | Profit still comes mostly from prices |
| Same | Micron plans to spend more on new factories next year |
The new part does protect Micron: in 2018, nothing stopped prices from falling. The parts that have not changed are the worry. More factories is how every past boom in the chip industry ended: too many chips, then lower prices.
And Micron is not the only one building. Samsung has moved up the opening of its next big memory factory, SK hynix‘s chairman says it will double output within five years, and China’s CXMT is building new DRAM factories in Shanghai and Hefei, according to Korean and industry press reports.
There is an early hint to watch, too. Micron now holds enough chips it has made but not sold to cover about 129 days of sales. That pile grew by 9 days in three months. Micron says part of that is building ahead before retiring older products, so it is not yet a warning.
The three signs I watch
I do not try to call the top. Each quarter I check three things:
- Do shipments start growing as fast as prices? If they do, the profit rests on more than price.
- Do unsold chips keep piling up?
- Does spending on new factories grow faster than demand?
If you hold Micron through an index fund, as I do, a fall in memory prices would pull your fund down, but only partly, because the fund holds many other companies. When tariff fears hit in April 2025, my account fell by a low-teens percent from its high, and I did not sell. Trying to guess the top would have led me to sell at the wrong time; watching for signs did not. That is why I watch these three.
The next check is Micron’s next report. Going by when it has reported before, I expect it between Dec 23 and Dec 30, 2026. If shipments catch up before prices turn, this boom can outlast 2018. If unsold chips and new factories keep growing, it looks like 2018 again.
A year from now, will Micron's quarterly sales be lower?
How each language voted
Resolves: Micron's report for the quarter ending September 2027 · Reader opinions, not investment advice.
Sources
- Micron earnings release, fiscal Q4 2026 (SEC Form 8-K, Exhibit)
- Micron fiscal Q4 2026 earnings call prepared remarks
- SEC EDGAR companyfacts (XBRL): quarterly history back to 2008, shares outstanding; valuation and cycle figures calculated by MKViz
- Yahoo Finance price data for Micron and SK hynix
- Yahoo Finance Micron price history, 2018