Micron (MU) Stock: Jim Cramer Calls It “Radically Undervalued” After 700% Rally

TLDR

• Jim Cramer called Micron “radically undervalued” and a “national treasure” during an Aug. 20 Mad Money segment in Boise
• MU closed at $974.33, up roughly 4% on the day and over 700% in the past year, trading at about 6x forward earnings
• Fiscal Q3 revenue hit $41.46 billion, up 346% year over year, with adjusted EPS of $25.11, beating estimates by $3.72
• CEO Sanjay Mehrotra and other executives sold a combined 177,179 MU stock worth around $181.8 million over the past quarter
• BMO Capital Markets initiated coverage with an “outperform” rating and a $1,300 price target; Bank of America set a target of $1,550

MU stock opened at $974.33 on Friday, up around 4% on the day. The stock has surged more than 700% over the past 12 months, with a 12-month low of $114.25 and a high of $1,255.00.

Micron Technology, Inc., MU

Jim Cramer visited Micron’s Boise headquarters on Aug. 20 and made his case on Mad Money. He called the chipmaker “radically undervalued” despite the massive run-up, pointing to its low forward price-to-earnings ratio of around six times.

Cramer is not alone. Bank of America added MU to its Best Investment Ideas list and raised its price target to $1,550. D.A. Davidson analyst Gil Luria went further, lifting his target to $2,000 from $1,500 while keeping a Buy rating.

BMO Capital Markets initiated coverage on Friday with an “outperform” rating and a $1,300 target. Morgan Stanley raised its target to $1,200 and rates the stock “overweight.” Of 39 analysts tracked, 33 rate it Buy and three rate it Hold.

Record Earnings Fuel the Bull Case

Micron’s Q3 numbers give the bulls plenty to work with. Revenue hit $41.46 billion, up from $9.30 billion a year earlier. Adjusted EPS came in at $25.11, beating consensus by $3.72. Non-GAAP gross margin reached 84.9%.

Management guided Q4 revenue to around $50 billion and adjusted EPS of $30 to $32. Analysts forecast full-year EPS of $72.93.

Micron has also locked in 16 Strategic Customer Agreements covering roughly 20% of DRAM volume, plus about $22 billion in customer deposits. That gives the company strong visibility into future demand.

CEO Sanjay Mehrotra said AI has “totally changed” the memory industry and that AI cannot scale without memory. Micron also unveiled Micron Research Labs in Boise, with roughly $10 billion in planned investment over the next decade.

Insider Selling and Buyback Limits Draw Attention

Executives sold 177,179 MU stock worth approximately $181.8 million over the past quarter. CEO Mehrotra sold 40,000 MU stock on July 24 under a Rule 10b5-1 plan set up on Jan. 30. EVP Sumit Sadana sold 15,000 MU stock on Aug. 18 for about $14 million, cutting his direct holdings by 7.28%.

Prearranged plans are a routine part of insider selling, and the transactions were filed well before the latest run-up. Still, the volume of selling has attracted attention from investors watching sentiment closely.

Micron is also restricted from large-scale buybacks under its CHIPS Act funding agreement. It has $2.16 billion remaining under a $10 billion authorization, but that restriction is set to expire on Dec. 9, 2026.

Institutional investors own 80.84% of MU. Notably, Stanley Druckenmiller’s family office reportedly sold its Micron position in Q2, citing valuation and volatility concerns.

Nvidia reports earnings on Aug. 26, an event analysts view as a potential catalyst for AI memory suppliers including Micron.

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