Is Micron Technology (MU) a Buy at 13x FY'26 Earnings Amid an AI-Driven Memory Gold Rush?

The semiconductor industry is undergoing a seismic shift, driven by the insatiable demand for artificial intelligence (AI) infrastructure. At the heart of this transformation lies high-bandwidth memory (HBM), a critical component for training and inference workloads in advanced AI models. Micron Technology (MU) has emerged as a key player in this space, with its forward price-to-earnings (P/E) ratio for fiscal year 2026 currently trading at 13x estimated earnings-a-stark discount to the industry average of 24.35x according to Seeking Alpha. This valuation dislocation, coupled with the durability of long-term HBM demand, raises a compelling question: Is Micron a buy at this price point?

Valuation Dislocation: A Discount to Peers Amid Growth Expectations

Micron's forward P/E of 13x FY26 earnings appears unusually attractive when compared to its peers. For context, the broader semiconductor sector trades at a premium, with a forward P/E of 24.35x according to Seeking Alpha. This gap reflects both market skepticism about cyclical risks and the company's aggressive reinvestment in HBM production. However, Micron's valuation is justified by its robust growth trajectory. Analysts project a 57% revenue increase for FY26, driven by surging demand for HBM in AI infrastructure. This growth is not speculative; it is underpinned by concrete supply agreements, with Micron's HBM3E production for 2026 already largely committed.

The discount to peers may also stem from short-term concerns about cyclicality. Unlike SK Hynix, which dominates the HBM market with a 62% share as of Q2 2025 according to ASTUTE Group, Micron's delayed entry into HBM4 production has created a perception of vulnerability. Yet, this narrative overlooks Micron's strategic advantages, including U.S.-based manufacturing and partnerships with hyperscalers, which position it to capture a growing share of the AI-driven memory market.

Long-Term HBM Demand: A $100 Billion Opportunity

The HBM market is poised for exponential growth, expanding from $17 billion in 2024 to $98 billion by 2030. This surge is fueled by the need for higher memory bandwidth in AI training, particularly for large language models (LLMs) and generative AI applications. Micron is uniquely positioned to benefit from this trend. Its HBM3E and upcoming HBM4 products are already being integrated into cutting-edge AI platforms, including NVIDIA's Blackwell B200 and AMD's Instinct MI350X series.

Moreover, HBM's share of the broader DRAM market is expected to rise from 18% in 2024 to 50% by 2030 according to Nasdaq. This structural shift reflects the growing importance of memory in AI workloads, where traditional DRAM is increasingly inadequate. Micron's ability to scale HBM production-supported by its 22.5% DRAM market share-provides a strong foundation for capturing this transition according to Blocks and Files.

Competitive Positioning: Catching Up to SK Hynix, but Not Falling Behind

While SK Hynix currently leads the HBM race with a 62% market share, Micron's technological roadmap and production strategy are narrowing the gap. SK Hynix's HBM4, with 10 Gbps data rates and improved power efficiency, has given it a first-mover advantage according to ASTUTE Group. However, Micron is rapidly closing the gap, with HBM4 samples already shipping at 11 Gbps and plans for HBM4E development. The company's U.S.-based manufacturing also offers a strategic edge in securing supply for domestic AI infrastructure, a critical factor in an era of geopolitical tensions.

Critically, Micron's 2026 HBM3E production is fully booked, indicating strong demand visibility. This contrasts with SK Hynix's focus on scaling HBM4, which may face cyclical headwinds if AI adoption slows. For investors, this dynamic suggests that Micron's near-term growth is more predictable, even as SK Hynix's long-term dominance remains a risk.

Conclusion: A Buy at 13x, But With Caution

Micron's 13x forward P/E for FY26 represents a compelling entry point, especially when weighed against its 57% revenue growth forecast and the $100 billion HBM opportunity. The valuation discount to peers reflects both cyclical concerns and Micron's lag in HBM4 production, but these risks are mitigated by the company's strategic investments, U.S. manufacturing, and strong customer relationships. While SK Hynix's leadership in HBM4 is a near-term headwind, Micron's aggressive roadmap and demand visibility position it to capture a significant share of the AI-driven memory gold rush.

For long-term investors, the key question is not whether HBM demand will materialize-but whether Micron can sustain its growth amid intensifying competition. Given its current trajectory, the answer appears to be a resounding yes.