Micron Technology (MU): Does a Low Earnings Multiple Understate Its AI Opportunity? Faheem Tahir Sat, November 14, 2026 at 2:30 PM EST 3 min read MU -4.66% ^IXIC -0.91% Trade MU on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
We just published the list of the 10 AI Infrastructure Stocks to Watch After CoreWeave's Earnings and Micron Technology, Inc. (NASDAQ:MU) ranked 7th on this list.
AI infrastructure stocks have faced considerable selling pressure in recent weeks, as concerns over data center expansion, rising borrowing costs, and regulatory uncertainty have weighed on investor sentiment. According to Bloomberg, hedge funds sold global technology shares during the week ending November 6 at a pace approaching the highest recorded in Goldman Sachs' data since 2016.
Much of the uncertainty stems from the U.S. midterm elections, which raised concerns about potential restrictions on data center construction. Reuters reported on November 5 that the Nasdaq Composite plunged 5.5%, while UBS analysts estimated that nearly 30% of anticipated U.S. data center capacity additions in 2028 could be at risk from potential construction pauses. The selloff also prompted Wall Street to reassess opportunities across the technology sector, as discussed in our recent coverage of 10 Stocks Analysts Just Upgraded.
Against this backdrop, the prominent AI cloud infrastructure provider offered some relief following its latest earnings announcement. On November 11, the company raised its annual revenue forecast and eased financing concerns by indicating that cash flows from existing contracts would cover its debt repayments. The developments also lifted other major AI infrastructure stocks.
However, the recovery proved short-lived as a leadership crisis at a major AI chipmaker introduced fresh uncertainty across the sector. On November 12, shares of the cloud infrastructure provider fell 9.1% after gaining more than 27% in the previous session, while the chipmaker declined 8.2% following its CEO's resignation amid an ongoing scandal.
Beyond these market swings, financing remains a concern. Reuters reported on November 12 that approximately 70% of record U.S. convertible bond issuance in 2026 was AI-linked, highlighting the industry's reliance on capital markets. Meanwhile, the selloff has renewed scrutiny of elevated technology valuations, a concern explored in our recent analysis of 10 High P/E Stocks Under the 200-Day SMA.
Micron Technology, Inc. (NASDAQ:MU) is one of the stocks to watch after CoreWeave's rally with 89.20% analyst upside, as CoreWeave's growth reinforces demand for the memory and storage required by AI servers. Shares gained 11.9% on November 11 as CoreWeave's results lifted memory stocks.
Micron Technology, Inc. (NASDAQ:MU) supplies high-bandwidth memory for AI accelerators, conventional DRAM, and NAND storage. Fiscal fourth-quarter revenue reached $54.23 billion, up from $41.46 billion sequentially, while adjusted earnings increased to $33.42 per share. Management guided the following quarter's revenue to approximately $61.5 billion.
Supply constraints give Micron Technology, Inc. (NASDAQ:MU) an opportunity to sustain pricing. Management said more than 75% of fiscal 2027 shipments were already committed. Expanding HBM production also consumes manufacturing capacity that could otherwise produce conventional DRAM, limiting how quickly supply can respond. Needham's October 1 Buy rating and $1,650 target support this argument, citing persistent shortages and higher pricing in new customer agreements.
Micron Technology, Inc. (NASDAQ:MU) trades at approximately 4.6 times estimated fiscal 2027 adjusted earnings. Our analysis of why record memory margins still command a low earnings multiple explores the key question: how much of today's profitability can survive the next downturn? Long-term agreements improve visibility, but they cannot eliminate competition or future supply additions. The valuation becomes compelling if those contracts preserve earnings through a weaker pricing environment, rather than simply extending the current boom.
While we acknowledge the risk and potential of MU as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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