Jim Cramer called Micron Technology “radically undervalued” and a “national treasure” during an Aug. 20 Mad Money visit to Boise, pointing to the chipmaker’s low forward valuation despite a massive stock rally.
MU closed at $974.33, up roughly 4% on the day and more than 700% over the past year. The shares trade at about six times forward earnings.
Bullish sentiment extends beyond Cramer. Bank of America recently added Micron stock to its Best Investment Ideas list and lifted its price target to $1,550.
CEO Sold 40,000 Shares Under Trading Plan
CEO Sanjay Mehrotra sold 40,000 Micron shares on July 24, according to an SEC filing.
The transactions were made under a Rule 10b5-1 plan adopted on Jan. 30, meaning the sales had been arranged months earlier rather than initiated after the latest stock rally.
Other executives also sold shares during July, adding to the optics around insider activity after MU’s extraordinary run. Still, insider selling after a several-hundred-percent gain is not unusual on its own, especially when transactions are prearranged. The more important question for investors is whether Micron’s earnings growth can continue to justify a valuation that has expanded rapidly alongside AI enthusiasm.
Micron also remains restricted from repurchasing shares under its CHIPS Act funding agreement. Its latest filing showed $2.16 billion remaining under the company’s existing $10 billion authorization.
AI Demand Drives Record Micron Results
Micron’s results provide the strongest support for Cramer’s valuation argument.
Fiscal third-quarter revenue jumped to $41.46 billion from $9.30 billion a year earlier. Adjusted EPS reached $25.11, while non-GAAP gross margin climbed to 84.9%.
Management expects about $50 billion in Q4 revenue and adjusted EPS of roughly $31, driven by strong demand for memory used in AI data centers.
The scale of that demand is increasingly visible in Micron’s customer commitments. The company has disclosed 16 Strategic Customer Agreements covering about 20% of DRAM volume, alongside roughly $22 billion in customer deposits. Those commitments give Micron unusually strong visibility into future demand and help explain why investors are assigning a much higher value to its earnings than in previous memory cycles.
That demand has also supported the broader AI rally, particularly among semiconductor stocks.
The key debate around Micron is now straightforward: record earnings growth and a low forward multiple support the bull case, while a 700% share-price gain, insider selling and limited buybacks leave less room for disappointment.
