Why Micron Stock Looks Cheap After a Record Year

Micron (MU) just posted record fiscal 2026 results, $133 billion in revenue and $75.52 in adjusted EPS, yet the stock trades at a forward P/E of 5.5. The S&P 500 sits at 19. That gap is the story.

Interpretation: a multiple that compressed relative to the index despite record earnings suggests the market is pricing in a downturn in memory rather than rewarding current results. Investors appear to be treating peak-cycle earnings as unsustainable.

The bull case rests on two concrete supports. MU has secured $32 billion in long-term customer agreements, which gives some visibility into demand. Server spending is also forecast to grow 28% annually through 2030, a tailwind for the company's end markets.

The bear case is supply. If new capacity floods the market, memory prices could decline, and earnings at this scale leave little room for error. A 5.5x multiple is essentially the market's discount for that cyclical risk.

The question is whether the $32 billion in contracts meaningfully dampens the typical memory price swings that depressed the multiple. If it does, the discount looks overdone. If pricing rolls over anyway, the low multiple may prove justified rather than cheap.