Growth stock Micron (NASDAQ: MU) has experienced an unbelievable rise. Over the last year, it’s climbed around 635% amid surging demand for memory chips.

The thing is, it still looks very cheap – the forward-looking price-to-earnings (P/E) ratio today is only 7.3. So could it still be worth considering for a Stocks and Shares ISA or Self-Invested Personal Pension (SIPP)?

Strong fundamentals

There’s no doubt that the fundamentals for Micron today look strong. Right now, hyperscalers (eg Amazon and Alphabet) are scrambling to buy memory chips for their data centres (because generative AI systems need memory to operate) and the company’s benefitting.

Just look at some of the figures from its recent Q2 fiscal 2026 earnings:

• Revenue of $23.86bn, up 196% year on year.
• Cloud Memory Business Unit revenue of $7.75bn, up 163%.
• Core Data Centre Business Unit revenue of $5.69bn, up 211%.
• Net income of $14bn, up 686%.

Looking at these numbers, the company is on fire at the moment.

“In the AI era, memory has become a strategic asset for our customers”

Sanjay Mehrotra, Chairman, President and CEO of Micron Technology

More growth to come?

Looking ahead, analysts expect the momentum to continue in the medium term as there’s a major shortage of memory chips at the moment (meaning Micron has pricing power). This financial year (ending 31 August), revenue is expected to come in at $109bn versus $37bn last year.

Meanwhile, next financial year, the forecast is $176bn. So we could be looking at some prolific growth in the near future.

What could go wrong?

While this all sounds exciting, it’s important to understand the basics of the memory market. Because it’s quite different to other areas of the chip market (eg GPUs and CPUs).

One thing to understand about the memory market is that it’s largely commoditised (products from different companies tend to be pretty similar).

By contrast, the GPU market’s highly differentiated. For example, in recent years, Nvidia’s GPUs have been far superior to others’ products.

Another thing to understand is that demand can fluctuate significantly. In the past, this has been a very cyclical market.

What tends to happen is that when demand’s high and supply’s short, tech companies over-order memory chips in an effort to try and guarantee supply. This can lead to sharp drop-offs in demand when demand moderates and/or supply catches up with demand.

Are Micron shares worth it?

Given these issues, Micron isn’t a guaranteed winner, even though the stock looks really cheap today. Because at some stage, growth could slow dramatically.

If it were to slow, and earnings fell, the stock wouldn’t look so cheap. In this scenario, I’d expect the share price to fall (perhaps significantly).

So investors really need to give some thought to the fundamentals of the memory market if they are interested in Micron shares. Because the market backdrop will have a big impact on the trajectory of the shares.

If investors expect demand for memory chips to remain high in the years ahead (note that Micron’s signing long-term deals at the moment), the shares could be worth considering. If however, they expect the memory market to cool at some stage in the not-too-distant future, they might want to look at other growth stocks.

Edward Sheldon has positions in Nvidia, Amazon, and Alphabet. The Twelfth Magpie has recommended Nvidia, Amazon, and Alphabet. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor and Hidden Winners. Here at The Twelfth Magpie, we believe that considering a diverse range of insights makes us better investors.