Micron Will “Buy Back a Hundred Billion Dollars” of Stock at Four Times Earnings

On CNBC's Halftime Report, a panelist said Micron will buy back $100 billion of stock, about 13% of its roughly $750 billion market value, at about 4x next year's earnings.

Buying back that much stock at that price lifts earnings per share by about 15%, and it's still a good deal even if earnings get cut in half.

Micron has authorized $35.16 billion of buybacks starting Dec. 9, and analysts expect $142.9 billion of free cash flow in fiscal 2027.

The main risk is the cycle: Micron last traded near this multiple in 2017 and 2018, just before EPS fell 79%. The first buybacks will show up in the quarter ending in early March.

Micron Technology ( MU:NASDAQ ) is now cheap enough to make investors nervous. Even after a 6% bounce on Friday from a 17% plunge in Thursday's chip rout, the stock trades at 3.9x forward earnings.

On Friday's episode of CNBC's Halftime Report , one panelist argued that the low price is exactly the point:

"If we want to talk about Micron, let's not forget they're going to buy back a hundred billion dollars worth of shares for a market cap that just got a lot cheaper, is 750 billion."

The panelist added that Micron has no debt and plenty of free cash flow, then summed it up: "at literally four times next year's earnings, I'm okay with it." (Strictly speaking, Micron had $5.2 billion of debt at Sept. 3, against $73.45 billion of cash and investments. Close enough.)

A hundred billion dollars is about 13% of the company. At 4x earnings, that's a big deal.

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Start with the earnings behind that 4x. Analysts expect Micron's normalized EPS to more than double again in fiscal 2027:

Fiscal 2028 is the estimate I'd watch for cuts. UBS analysts warn that construction pauses after the midterms could threaten around 30% of the US data-center capacity expected to be added that year.

The cash is showing up too. Free cash flow jumped from $1.67 billion in fiscal 2025 to $59.0 billion in fiscal 2026:

Analysts expect $142.9 billion of free cash flow in fiscal 2027 alone, so $100 billion of buybacks would take less than one year's worth. Micron's board hasn't committed to that much yet. It has authorized up to $35.16 billion of repurchases starting Dec. 9, an amount based on a single quarter's free cash flow after dividends. With cash coming in that fast, I'd expect more authorizations to follow.