Micron Technology, Inc. (MU): Our Calculation of Intrinsic Value

August 7, 2026 - 14:17

Every week, we run a discounted cash flow model on a company from our watchlist to see if the market price matches the long-term fundamentals. This week, we turned our attention to Micron Technology, Inc., the Idaho-based memory chip maker.

Micron is one of the few companies that designs and manufactures both DRAM and NAND flash memory at scale. Its products go into data centers, AI servers, laptops, and mobile devices. The company has been a major beneficiary of the artificial intelligence buildout, as high-bandwidth memory (HBM) is now a critical component for AI accelerators. That shift has changed the revenue mix and pushed average selling prices higher.

For our calculation, we projected free cash flows over the next ten years, then discounted them back to present value using a weighted average cost of capital of about 10 percent. We assumed revenue growth of 18 percent for the next two years, driven by continued AI demand and a recovery in traditional PC and smartphone markets. After that, we tapered growth to 6 percent annually, which is still above the industry average but reflects Micron's improving position in high-value memory.

We also factored in capital expenditures. Micron is spending heavily on new fab capacity, especially for HBM and advanced node transitions. That spending weighs on near-term free cash flow, but we expect it to pay off as the company locks in long-term supply agreements with major cloud providers.

After running the numbers, our intrinsic value estimate lands around 148 dollars per share. The stock currently trades below that level, which suggests a modest margin of safety. However, the memory industry is cyclical, and pricing can swing quickly. A sudden drop in demand or a faster-than-expected ramp by competitors could push the fair value lower.

We are not making a buy or sell call here. The model is just one tool. But for investors who believe AI demand will stay strong for several more years, Micron looks reasonably valued at current prices, with room for upside if execution stays on track.