Micron’s Earnings Beat Was One of the Largest Our Strategist Has Ever Seen, but Can It Last?

On the March 23 episode of The Morning Filter_, _David Sekeraand Susan Dziubinski discuss Micron’s more than stellar earnings, why the stock pulled back, and whether the stock is a buy today. Here is an excerpt from the show.

Micron’s Pullback After Earnings Blowout

**Susan Dziubinski: **We don’t have much on radar this week in terms of economic or earnings reports, so we’ll move straight to new research from Morningstar, starting with last week’s earnings report from Micron Technology. Results and forecasts were both stellar, yet the stock pulled back. Dave, why do you think the market was not impressed, and what did Morningstar think of the results?

**David Sekera: **I think stellar is actually probably the understatement when I’m looking at what the results were. They beat revenue and earnings estimates by probably one of the largest margins I think I’ve seen over the course of my career. And then they gave guidance for the May quarter, which was essentially double FactSet consensus. All about the AI build-out boom, all about just the huge shortage that we’re seeing in memory semiconductors today. When you think about it, if you’re building a data center today, it’s a couple hundred million dollar, if not a couple billion dollar facility. You’re going to pay whatever you have to pay to be able to open it on time. You are not going to be the person going to your boss and saying, “Hey, we need to delay this weeks or months because we can’t get enough memory in there,” because of course you do that, you’re going to lose your job. So you’re going to pay whatever the market demands right now.”

So specifically like DRAM prices, our analysts noted those are up 140% year over year. NAND prices up 170% year over year. And at this point, we’re forecasting prices to continue to keep rising into 2027. The real question is, how long can this last? We’ve talked about this company and some of the other commodity-oriented tech hardware companies a number of times over the past few months. To some degree, prices will fall once that new supply starts to come online. In fact, I think prices probably even fall once you really know exactly when that’s going to come online. You can forecast and see a couple of months ahead as they build new facilities, when they’re going to be up and running. So right now, if you look at our forecasts, we’re looking for prices to peak in late 2027, maybe early 2028.

And I think that’s probably when you see really the big inflection in pricing in that market. As you noted, it is interesting that Micron stock sold off after earnings. No one knows exactly really why. Now, my guess in having talked to the analysts, I think it just might be how much they increase their capex spending. They’re planning on spending $25 billion this year. That’s pretty close to being double the $13.8 billion that they spent last year. That’s three times the amount that they spent in 2024, which was $8 billion. So to some degree, when I’m thinking about the stock and where it trades, you’re kind of in a catch-22. The more the capacity rises, the faster they build it out to try and capture these currently high prices. That just means the sooner and more prices will fall once that new supply starts to hit the marketplace. I think at this point, seeing that pullback, the market might now be pricing in a shorter time frame for them to be able to capture these excess prices.

Micron Earnings: What’s Past The Stratosphere? Incredible Pricing Upcycle Blows Us Away Once Again

Is Micron Stock a Buy?

**Dziubinski: **Morningstar raised its fair value estimate on Micron pretty significantly up to $455. Is the stock attractive from a valuation perspective after that increase in fair value?

**Sekera: **It’s not. It’s currently rated 3 stars. I don’t know when the correction is going to be and when that occurs, but I think this is going to be one of those situations that when it does occur, this could be one that definitely gaps to the downside very quickly.

Subscribe to The Morning Filter on Apple Podcasts_, or wherever you get your podcasts, and keep up with the latest research from hosts Susan Dziubinski and David Sekera on Morningstar.com._

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			46m 17s
		 Mar 23, 2026

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