Micron Technology reported exceptional fiscal first-quarter earnings, pushing its stock up by 13%. The company’s stock has increased 202% this year, escaping the downturn affecting many AI stocks due to its strong valuation metrics. Micron’s low P/E and PEG ratios suggest potential for continued growth.
The company achieved record revenue of $13.64 billion in the quarter ending 27 November, a 56% increase from the previous year and exceeding estimates. It reported a net income of $5.2 billion, marking a 175% increase year-over-year.
Micron’s gross margin rose to 56%, up from 38.4% last year. The company’s cloud memory unit, a major contributor, saw a 99% revenue increase, reaching $5.3 billion. This segment includes AI memory chips supplied to major tech firms like Microsoft, Amazon, and Google.
For the second fiscal quarter, Micron forecasts $18.7 billion in revenue, a 37% rise from Q1. The gross margin is expected to increase to 66%, with earnings projected at $8.19 per share. Micron attributes its success to its technological leadership, diverse product offerings, and effective operational execution.
Following the massive 13% jump after earnings, implied volatility in Micron options has likely collapsed. This post-event environment presents a cleaner opportunity for positioning over the next few weeks without paying the high pre-earnings premium. We see this as a prime time to initiate fresh bullish trades based on the company’s incredibly strong forward guidance.
Given the projected 37% revenue growth for the next quarter, buying call options with expirations in February or March 2026 seems logical. This allows time for the market to fully digest the future earnings power highlighted by the $8.19 EPS target. Looking at longer-dated options avoids the rapid time decay of weeklys while still capturing the expected upward momentum.
For those with a slightly more cautious view, selling cash-secured puts at strike prices below the current market level is an attractive strategy. With a forward P/E of just 11, we believe there is a solid valuation floor, making it a high-probability trade to collect premium. Alternatively, a bull call spread can define risk while capitalizing on the clear upward trajectory.
This outlook is supported by recent industry data showing the high-bandwidth memory (HBM) market is expected to grow by over 150% in 2026. Data center construction, a key driver for cloud memory, has also accelerated, with spending up nearly 20% year-over-year according to the latest reports from November 2025. This confirms the demand Micron is seeing is part of a much larger, durable trend.
We have seen cycles like this before, particularly during the semiconductor supercycle of 2020-2021, where strong demand led to sustained stock price increases for months. While the semiconductor index (SOX) has gained 65% this year, Micron’s 202% gain shows it is a clear leader. History suggests that leaders in these cycles often continue to outperform the broader sector for several quarters.
As we head into the end of the year, holiday-thinned trading volume could lead to price stability or steady upward drift. This is an ideal environment for strategies that benefit from time decay, such as selling puts or covered calls. However, given the explosive growth forecast, we would be cautious about capping upside with covered calls unless the premium is exceptionally rich.
