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Micron Stock Still Cheap Despite 25% Rally, Analysts Say
Written by Gabriel Osorio-Mazilli. Published 8/19/2025.
Key Points
- Micron Stock has beaten earnings expectations, but future forecasts aren't priced in either, creating an upside opportunity for investors.
- Wall Street analysts are boosting the stock, and institutional buyers are coming in hot.
- New data center and HBM chip demand drive the upside momentum in Micron stock.
Most investors are rightfully wary of trading or buying a stock during earnings season, since the implied volatility around the announcement dates can throw off even the shrewdest in the marketplace. However, knowing what to look for helps in a situation like this, and that is where an opportunity for continued rallies has just shown up inside the technology sector of the United States.
Tied to the massive demand wave for chips and data centers hitting the global economy, shares of Micron Technology Inc. (NASDAQ: MU) are giving investors new reasons to stick around and watch the show go on further (and higher).
Even though the stock has already rallied recently, partly due to the ongoing industry expansion and its recent upbeat earnings results, the current setup also suggests that Micron could continue to go higher.
This is where savvy investors will recall that the market always prices a stock based on its future growth expectations. Comparing today’s valuation for Micron stock versus the future forecasts for earnings per share (EPS) will point investors to a widening gap that can only be closed by another wave of upswings in the stock price.
Micron Stock Is Back in the Game
After being left behind by peers in the industry, a previously lackluster performance has become a shining star for investors in the artificial intelligence and data center sectors. Over the past quarter, Micron stock has delivered a 25.2% rally, outperforming the broader S&P 500 index by a significant margin, with the S&P 500 index showing an 8.6% performance.
Outperforming the market over one quarter is one thing, which is in the past; now, investors need to look to the future to determine whether Micron has what it takes to break into new highs. Perhaps the initial answer can be found in the company’s latest quarterly earnings report.
While the market expected Micron to report $1.57 in EPS, it beat these forecasts with $1.91 instead (22% above consensus). That beat alone was enough to rally the stock and close the performance gap against some of its biggest peers and competitors, but there’s more to the numbers.
Micron’s HBM chips saw higher-than-expected demand this quarter, and management provided guidance that this trend would continue into the coming quarters. Therefore, investors have a reasonable basis to consider when determining Micron's stock valuation and future trading price.
It is now time for these investors to connect the dots moving forward, and cushion the anxiety that comes with thinking of buying a stock near its 52-week high.
This Ratio Sets the Stage for Micron Stock
The price-to-earnings-growth (PEG) ratio is often used to gauge the relation between today’s valuation multiples and tomorrow’s expected EPS growth, essentially checking whether this growth has been priced in. Any reading below 1.0x suggests not all of this future growth has been priced in, leaving investors with upside opportunities.
For Micron, considering that Wall Street analysts now forecast $2.04 in EPS for the fourth quarter of 2025, it seems that today’s P/E multiples have fallen below where they need to be if they are to suggest all this is priced in already. Therefore, Micron carries a PEG of only 0.2x, implying that 80% of this future EPS growth is not priced in.
Living and breathing these multiples in their research, some Wall Street analysts decided to give their opinion about where Micron stock should be trading. While the consensus view is of a Moderate Buy rating valuing Micron at $147.2 per share, others aim to incorporate this future EPS growth potential driven by new HBM demand.
For instance, Kevin Cassidy from Rosenblatt Securities is an analyst who sees Micron stock as a Buy with a valuation target of $200 per share. Compared to where the stock trades today, that call would imply an additional upside potential of 62% to justify this stock being considered even after its recent rally.
With this setup in mind, plus the stock’s recent momentum, it shouldn’t come as a surprise for investors to see new institutional buying activity for Micro stock. As of mid-August 2025, those from Rafferty Asset Management added 37.5% to their existing holdings in Micron, bringing their net position to a high of $508.9 million today.
This should serve as a vote of confidence and high conviction, tied to the fundamental industry setup and Micron's significant demand growth. This sets Micron up for a potential undervalued position compared to the EPS it can deliver in the coming months.
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