Jonah Lupton
CEO & CIO of FirstWave Capital, Long-Biased Growth
Micron could grow EPS at about 90% a year over the next two years, since management says memory supply stays tight through 2028 or later. That assumes 20-25% bit growth, blended prices rising 15% a quarter early in FY2027 and slowing to 6% by late FY2028, and 10% annual buybacks. Micron would then trade at about 4x FY2028 EPS before $400B+ of cash generation, under a 0.1x PEG. A two-year EPS growth rate below 50% is almost impossible, and 100% is possible. x.com x.com
Micron's revenue grew faster than its stock over the past year, leaving it cheaper on trailing earnings. Quarterly revenue rose from $11.3B to $54.2B, while the stock rose from about $198 to $878 and trailing P/E fell from roughly 24x to 11.6x. x.com
Micron's sold-out high-bandwidth memory through 2027+ and contracts already being signed for 2029-2030+ extend its earnings runway. At 5x forward earnings, it is cheaper than a year ago; its private Anthropic stake is about to be instantly rerated at Anthropic's IPO, and a new share buyback is expected to be announced Dec. 9. Micron could certainly gain 30% in three months. x.com x.com
If Micron has only two years of decent forecasts, its limited visibility warrants a lower multiple, not a higher one. x.com
Demand for Micron's products is through the roof, making its revenue surge only the beginning as it heads into 2027. The attached eight-quarter chart puts Q4 FY26 revenue at $54.2 billion, and Micron's gross margin is cited at 86%. A $100 billion revenue quarter could arrive in the not-so-distant future; the stock is a good bet here. x.com
Micron's valuation looks ridiculous given the street's eight-year EPS estimates, even with a projected 2028 earnings peak and subsequent decline. At under $900, it trades at 5.09 times this year's expected EPS of $176.55. If consensus plays out, 2027-34 EPS would total $921.56, more than the share price; if analysts are wrong about when EPS peaks, Micron would look even cheaper. x.com
Micron's own guidance suggests the memory recovery comes later than consensus thinks. Its CFO guided to rising margins through fiscal 2027 alongside a more moderate pace of price increases, and Micron said it has no line of sight to when supply and demand will return to balance. x.com x.com
Micron trades at an absurd 4-5x P/E on $200–$220 of annual EPS while Wall Street keeps moving the goalposts. On September 30, CEO Sanjay Mehrotra should report $35–$38 of EPS versus guided $30–$31 and call it a structural boom, yet the market will still ask for the next quarter. Free cash flow at levels none of the Big Five match could fund a buyback of up to 40% of its market cap. x.com
Micron is a complete bargain at just 12x the most conservative estimate of its FY2027 free cash flow, supporting a $1,800 price target for the end of 2027. If it delivers anything close to the $100 billion of FCF expected, today's price should look like a massive opportunity in hindsight. The shares are down 13% over three months despite a very strong report. x.com
Micron looks expensive on price-to-book at about 8x versus a historical average of about 2x, and relying on forward P/E for such a cyclical business can be dangerous. x.com
Micron's results keep exceeding what a peak-earnings view implies. Revenue rose 379% to $54.2B with an 87% gross margin and $33.2B of free cash flow, Q1 revenue guidance implies 351% growth, and supply should get tighter in fiscal 2027 and 2028. The market still sees peak earnings. x.com