Micron Jumps 32% with Fourth-Largest Trading Volume, Bucking Tech Downturn Thanks to AI-Fueled Rally

Market Overview

On February 25, 2026, Micron Technology (MU) ended the trading day up 2.63%, outperforming the broader technology sector as the Nasdaq Composite Index ($NASX) fell by 2.4%. Despite a 20.63% decrease in trading volume from the previous session, totaling $11.23 billion, MU still ranked as the fourth most actively traded stock. Since the start of the year, MU has climbed 32.3% and is trading near $420. Analysts are optimistic, with many expecting the stock to challenge its 52-week high of $500. This strong performance stands out against a general tech downturn, fueled by impressive fiscal 2026 earnings and Micron’s strategic focus on AI-driven demand for memory products.

Main Factors Fueling the Surge

Micron’s recent rally is the result of several key developments: record-breaking Q1 fiscal 2026 results, soaring demand for high-bandwidth memory (HBM), and significant manufacturing expansion. In the first quarter of 2026, the company posted $13.6 billion in revenue, marking a 57% increase year-over-year. DRAM sales surged by 69% to $10.8 billion, while NAND revenue rose 22% to $2.7 billion. Adjusted earnings reached $4.78 per share, up 167%, and free cash flow hit $3.9 billion, enabling Micron to reduce debt and strengthen its $12 billion cash position. These achievements highlight Micron’s ability to benefit from the growing investment in AI infrastructure, which is driving demand for advanced memory solutions in data centers, personal computers, and cloud platforms.

A major growth driver is Micron’s leadership in the HBM market, a rapidly expanding segment. Micron has secured pricing and supply agreements for its entire 2026 HBM output, including the advanced HBM4 product, which boasts speeds over 11 gigabits per second. Production of HBM4 is scheduled to accelerate in the latter half of 2026, with strong yields anticipated. The HBM market is expected to expand at a 40% compound annual growth rate through 2028, potentially reaching $100 billion. Micron’s early adoption of advanced manufacturing nodes positions the company to capture significant market share. Additionally, its data center NAND business generated over $1 billion in quarterly revenue, further diversifying its portfolio of high-margin products.

Micron is also investing heavily in manufacturing to support its growth. The company increased its fiscal 2026 capital expenditure plan to $20 billion, up from $18 billion, to alleviate supply constraints and meet rising demand. Construction is progressing on new facilities in Idaho and New York, with the first Idaho plant expected to begin wafer production by mid-2027 and a second facility planned for 2028. These expansions are designed to ensure a steady supply for major clients, including hyperscale data center operators and AI GPU manufacturers, while reducing dependence on competitors such as Samsung. By focusing on high-margin HBM and advanced nodes, Micron has managed to reduce exposure to industry cycles and maintain pricing power in a tight market.

Analyst sentiment remains highly positive. Out of 42 analysts tracking MU, 33 have issued a “Strong Buy” rating, with the average 12-month price target above $350.45. Forecasts for fiscal 2026 include revenue growth of 103.8% to $76.1 billion and adjusted earnings of $33 per share, followed by projected revenue growth of 28.1% and earnings exceeding $45 per share in 2027. The stock’s forward price-to-earnings ratio of 12 is considered attractive given its growth outlook, as demand for AI-related memory outpaces that for traditional semiconductors. Nonetheless, risks remain, such as the potential for oversupply if rivals ramp up production or if macroeconomic challenges slow AI investment.

Outlook and Industry Implications

Micron’s current trajectory signals a fundamental transformation in the semiconductor sector, where memory is becoming as essential as processing power for AI adoption. With its 2026 HBM capacity already sold out, record profit margins, and a strong balance sheet, Micron is well-positioned for continued growth. The upcoming Q2 earnings report on March 18, 2026, and updates on HBM4 production will be important milestones. While the bullish outlook depends on sustained AI-driven infrastructure spending, Micron’s solid fundamentals suggest that the memory market’s growth cycle is far from over—even as investors debate whether the stock can reach $500.