Why Micron and Dollar General Are Must-Have Buys as 2026 Looms

As 2026 approaches, investors are increasingly seeking opportunities that balance macroeconomic resilience with high-growth potential. Two stocks that stand out in this landscape are Micron Technology (MU) and Dollar General (DG). While Micron is capitalizing on the AI-driven memory supercycle, Dollar General is leveraging its countercyclical retail model to thrive in a slowing economy. Both companies offer compelling value propositions, supported by strong forward earnings estimates, margin expansion, and strategic momentum.

Micron: A Low-Valued Play on the AI Revolution

Micron Technology has emerged as a central player in the AI infrastructure boom, driven by surging demand for high-bandwidth memory (HBM) in data centers. According to a report by , the company raised its Q2 2025 revenue guidance to $18.7 billion, far exceeding Wall Street's $14.23 billion estimate, citing "high teens" growth in server unit demand and full allocation of HBM capacity. This surge is translating into record margins: Micron anticipates gross margins of 68% for the quarter, bolstered by pricing power and supply constraints in DRAM and NAND markets.

Valuation metrics further underscore Micron's appeal. Its forward P/E ratio of 9.55x and a PEG ratio of 0.53 suggest the stock is undervalued relative to its earnings growth. Analysts from Morgan Stanley and Susquehanna have raised price targets, citing "structural demand from AI infrastructure" and "extended memory upcycles". With fiscal Q1 non-GAAP EPS at $4.78 and Q2 guidance of $8.19 per share, Micron's revenue growth assumptions now reach 24.21%, positioning it as a high-conviction buy for investors betting on the AI-driven memory supercycle.

Dollar General: Countercyclical Resilience in a Slowing Economy

While Micron thrives on technological innovation, Dollar General is capitalizing on macroeconomic tailwinds as consumer spending shifts toward value-driven retailers. The company's forward P/E ratio of 17x is significantly lower than the industry average of 25.89x, suggesting it is undervalued relative to its earnings potential. estimates Dollar General is undervalued by 23%, with an intrinsic value of $172.70 per share.

Dollar General's strategic expansion is a key driver of its resilience. The company plans to open 450 new U.S. stores in 2026, focusing on rural markets, while also remodeling 4,250 existing locations to enhance the shopping experience. This strategy is paying off: Q2 2025 net sales grew 5.1% year-over-year to $10.7 billion, with same-store sales up 2.8%. Analysts have raised FY2026 EPS estimates to $6.43 from $6.15, reflecting confidence in the company's ability to maintain profitability even as consumer spending pressures mount.

Historically, Dollar General has outperformed during economic downturns. During the 2008 and 2020 recessions, it achieved same-store sales growth of 9% annually, outpacing peers like Big Lots and Macy's. In 2025, its stock surged 37.7%, outperforming the S&P 500's 12% gain, a testament to its defensive positioning. With a PEG ratio of 2.19 (slightly below the industry average of 2.63), Dollar General offers a compelling combination of affordability and growth.

Conclusion: Contrarian Buys for a Diversified Portfolio

Micron and Dollar General represent two distinct yet equally compelling investment theses. Micron's AI-driven growth and low valuation make it a high-conviction bet on the future of computing, while Dollar General's countercyclical model provides a hedge against economic uncertainty. Both stocks are supported by strong earnings momentum, margin expansion, and strategic initiatives that align with macroeconomic trends. For investors seeking to balance innovation and resilience in 2026, these are must-have additions to a diversified portfolio.