Why the Market Continues to Sleep on Micron's Growth Potential

Longer-term agreements could mitigate the effects of a downcycle.

The behavior of Micron (NASDAQ: MU) stock has shown extreme volatility, particularly over the last year. The stock made gains of almost 690% over the last 12 months, only to fall by nearly 30% since peaking in June.

The pullback was likely a breather from a run that accelerated in April. Nonetheless, a relatively low valuation may leave some investors confused as to why Micron has not risen further. However, a key factor plays into that, and consequently, the stock could struggle to realize its full potential for that reason.

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Micron's stock is likely not meeting its full potential due to its historical volatility.

In some sense, the stock is an incredible bargain below $1,000 per share . The company has experienced massive revenue increases when demand exceeds supply and chip prices spike. However, that trend cuts both ways. When supply exceeds demand, revenue growth has often experienced dramatic reversals, causing profits to fall and the stock price to crater.

Oversupply is not an issue right now. In the first nine months of fiscal 2026 (ended May 28), revenue of $79 billion surged 203% compared to the same period last year. Additionally, the company's $47 billion in net income for the first three quarters of fiscal 2026 amounted to a 60% net margin. It also far exceeded the $5 billion earned in the same period one year ago.

Looking forward, analysts forecast 247% yearly revenue growth in the current fiscal year. Also, while the 85% revenue increase forecast for fiscal 2027 is technically a growth slowdown, it still suggests the upcycle is unlikely to end soon.