A stock is about to report a 10-fold jump in its earnings per share. The same stock is the cheapest among large U.S. technology companies.

Both things are true for Micron Technology Inc. (NASDAQ:MU) heading into its fiscal fourth-quarter earnings.

Micron reports results next Wednesday, Sept. 30, after the market closes. Wall Street expects adjusted earnings of $31.43 per share.

A year ago, Micron earned $3.03 per share in the same quarter. That is an increase of about 940%.

Over the next twelve months, analysts expect Micron to earn $144.94 per share.

At a share price of about $1,060, investors are paying roughly 7.3 times those expected profits.

That is the lowest forward price-to-earnings ratio among the companies in the Technology Select Sector SPDR Fund (NYSE:XLK).

The contradiction raises the real question heading into earnings: why is Wall Street putting such a low price on some of the fastest profit growth in the market?

Micron’s Earnings Have Grown Every Quarter This Year

Micron’s profits have climbed quarter after quarter in fiscal 2026

In June, Micron reported fiscal third-quarter revenue of $41.46 billion, up from $9.30 billion a year earlier. Adjusted earnings of $25.11 per share beat the consensus estimate of $20.71.

The company then guided fourth-quarter revenue to $50 billion, plus or minus $1 billion.

In addition, it guided adjusted earnings to $31.00 per share at the midpoint and gross margin to about 86%.

Gross margin measures how much of each dollar of sales remains after the cost of making the product.

One year ago, Micron’s gross margin was 39%.

For the full fiscal year, consensus estimates point to earnings of about $73.44 per share, nearly nine times the prior year.

Memory Chips Became the Bottleneck of Artificial Intelligence

Micron makes memory chips. There are two main types.

DRAM, or dynamic random-access memory, holds the data a processor is working on in the moment. NAND flash, by contrast, stores data permanently, as in a phone or a solid-state drive.

Artificial intelligence servers need very large amounts of fast memory.

The most advanced version is high-bandwidth memory, which is stacked directly next to the AI processors.

Only three companies in the world produce it. They are Micron, SK Hynix Inc. (NASDAQ:SKHY) and Samsung Electronics Co. Ltd. (OTC:SSNLF).

Meanwhile, demand for these chips has grown faster than the industry can build factories.

When supply is short, prices rise. When prices rise, the profit on every chip already produced rises with them.

For this reason, Micron’s margins more than doubled in twelve months.

Why Investors Still Pay So Little for Micron’s Earnings

The answer lies in the history of the memory industry.

Memory chips are close to a commodity. For example, one company’s DRAM can be swapped for another’s.

As a result, prices are set by supply and demand.

When prices are high, every manufacturer builds new capacity.

A few years later, that capacity comes online at the same time. Supply then exceeds demand, and prices fall.

Micron has lived through this cycle many times. In past downturns, its profits have turned into losses within a few quarters.

Consequently, investors tend to pay low multiples when memory earnings are at their highest. They assume those earnings will not last.

The Contracts Designed to Break the Cycle

However, Micron is trying to change that assumption.

In June, the company disclosed 16 strategic customer agreements.

These are multi-year contracts, some with fixed prices and some with price floors and ceilings.

Micron said the remaining obligations under the agreements signed so far total about $100 billion.

Management said the contracts will make its earnings more durable and more predictable.

If the market accepts that argument, the stock would be valued less like a cyclical commodity producer and more like a steady technology company.

Can Micron Break the Memory Chip Trap?

The Sept. 30 report will provide another test.

Another earnings beat would reinforce the strength of the current memory shortage.

But guidance may matter even more.

Wall Street already expects Micron to earn about $34.88 per share in fiscal first quarter 2027.

Investors will therefore focus on whether pricing, margins and customer commitments suggest today’s profitability can persist.

A low forward price-to-earnings ratio does not automatically make a stock cheap.

It tells investors how much confidence the market places in the earnings forecast.

For Micron, the gap between explosive earnings growth and a seven-times multiple sends a clear message.

Wall Street expects the profits.

It still questions their durability.

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