For Immediate Release
Chicago, IL – June 1, 2026 – Zacks Equity Research shares Micron Technology MU as the Bull of the Day and Houlihan Lokey HLI as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Kinder Morgan, Inc. KMI, MPLX LP MPLX and The Williams Companies, Inc. WMB.
Here is a synopsis of all five stocks:
Bull of the Day:
Micron Technology is back on the coveted Zacks Rank #1 (Strong Buy) list after a very brief hiatus.
Before slipping from this top rank, MU had been the longest-running Strong Buy recommendation from Zacks, climbing more than 700% from the time it first earned the designation in August of last year, when I covered the stock shortly after as the Bull of the Day, stating it was still flying somewhat under the radar.
Fast forward, and MU has climbed from $117 a share at the time of that Bull of the Day writing to nearly $1,000 a share at the time of this one.
While Micron has already delivered monster gains for investors, the semiconductor leader still looks poised for further upside as artificial intelligence spending continues to reshape the memory chip market.
Of course, some investors may feel like they've already missed the big move higher, but Micron's combination of record earnings growth, expanding margins, and unprecedented visibility into future demand suggests the rally may be far from over.
To that point, Micron has become one of the most important suppliers in the AI ecosystem, and Wall Street may still be underestimating how dramatically the memory chip industry has evolved beyond its traditionally cyclical nature.
AI Has Transformed the Memory Market
For years, memory manufacturers were viewed as highly cyclical businesses prone to boom-and-bust swings. However, the AI revolution is creating a fundamentally different demand environment.
High-bandwidth memory (HBM) has become a critical component in advanced AI accelerators from companies like Nvidia (NVDA). These chips require enormous amounts of ultra-fast memory to process and move data efficiently. As AI infrastructure spending continues to surge, demand for HBM remains significantly ahead of supply. Micron has stated that its HBM production is effectively sold out through 2026, providing a level of revenue visibility that memory companies have historically never enjoyed.
This supply-demand imbalance has created substantial pricing power for Micron, allowing the memory chip leader to generate record profitability while securing long-term customer commitments.
Record Results Continue to Impress
Micron's recent financial performance highlights the strength of this long-term growth trend.
Most recently reporting results for its fiscal second-quarter at the end of March, Micron's Q2 revenue nearly tripled year over year to $23.86 billion from $8.7 billion a year ago. Furthermore, this was up 75% sequentially, from revenue of $13.64 billion in Q1.
Meanwhile, adjusted earnings skyrocketed 682% YoY to $12.20 per share while operating cash flow ballooned to nearly $12 billion. Management also projected another record quarter ahead, citing strong demand, tight industry supply, and continued momentum across AI-related products.
CEO Sanjay Mehrotra noted that Micron set records for revenue, gross margin, earnings per share, and free cash flow, with expectations for additional records in Q3 when the company reports on Wednesday, June 24.
Perhaps most importantly, these gains aren't being driven solely by a one niche product category. Growth has spread across DRAM, NAND, data-center memory, mobile, automotive, and embedded markets, demonstrating broad-based strength throughout Micron's business segments.
Why MU's Rally May Continue
Notably, several catalysts could keep driving MU shares higher, with it noteworthy that Micron's annual earnings are now expected to soar over 600% this year to $59.67 per share. Plus, FY27 EPS is projected to spike another 72% to an astonishing $102.63.
1.First, hyperscale cloud providers continue investing aggressively in AI infrastructure. Every new generation of AI servers requires larger quantities of high-performance memory, creating a powerful tailwind for Micron.
2.Second, industry supply remains constrained. The technical complexity of HBM manufacturing limits how quickly competitors can add capacity. Even as companies like Samsung and SK Hynix increase HBM production, demand continues to outpace available supply. Analysts estimate the HBM market could roughly double between 2026 and 2027.
3.Third, Micron's earnings power has increased dramatically. Higher-margin AI products are becoming a larger percentage of revenue, supporting significant gross-margin expansion and cash-flow generation. Several Wall Street firms have recently raised their price targets as EPS expectations keep moving higher.
(4). Micron's Valuation is Still Very Reasonable
Despite Micron's impressive run, valuation remains one of the strongest parts of its bull case, even with MU commanding quite a lofty price tag but trading at just 15X forward earnings.
Many AI beneficiaries trade at much higher premium multiples reflecting years of anticipated growth. Micron, however, continues to trade at a valuation that suggests investors remain skeptical about the durability of current earnings levels.
That said, some analysts are increasingly arguing that AI-driven memory demand is more structural than cyclical, which could justify a higher earnings multiple over time. If Micron continues to deliver strong execution while AI spending remains robust, investors could see both earnings growth and further multiple expansion.
Conclusion & Final Thoughts
Micron has evolved from a traditional memory-chip manufacturer into one of the most important enablers of the AI revolution. Record earnings, sold-out HBM capacity, strong pricing power, and expanding margins provide a compelling foundation for continued growth.
Although volatility should be expected after such a powerful rally, the fundamental drivers behind Micron's business remain firmly intact. As long as AI infrastructure spending continues to accelerate, Micron appears well-positioned to remain one of the biggest winners in the semiconductor space.
For growth investors looking for continued exposure to the AI buildout, Micron Technology still looks like a stock worth buying.
Bear of the Day:
Houlihan Lokey has long been one of the most respected names in independent investment banking, but its stock is now facing a meaningful shift in analyst sentiment.
Over the past several weeks, earnings estimates have been moving sharply lower, with the downward trend reflecting a combination of softer-than-expected financial results, weakening momentum in key business lines, and cautious management commentary.
With EPS revisions falling this broadly, Houlihan’s stock has been flagged as a potential underperformer, landing a Zacks Rank #5 (Strong Sell) and the Bear of the Day.
A Double Miss That Reset Expectations
Sparking concerns was Houlihan’s most recent fiscal fourth-quarter report last month, the catalyst for what has been a wave of downward EPS revisions:
· Q4 Revenue of $635.64 million missed the $687.1 million Consensus by 7% and fell 4% from the prior year quarter.
· Q4 EPS of $1.63 missed expectations of $1.84 by 11% and dropped from $1.96 a year ago.
A miss on both the top and bottom line is usually enough to trigger estimate cuts, but what concerned analysts even more was that the weakness showed up in Houlihan’s core Financial Restructuring (FR) business, which advises companies, creditors, private equity sponsors, and other stakeholders when a company is under financial stress or needs to reorganize its balance sheet.
Restructuring Slowdown & Broad Underperformance
Best known for its leadership in financial restructuring, a segment that historically delivers some of Houlihan's highest margins, recent declines have raised eyebrows.
To that point, Q4 Restructuring revenue fell 33% YoY to $110.4 million and noticeably missed expectations of $137.2 million.
This is a notable shift because restructuring tends to boom during periods of broader economic uncertainty, which, of course, has been highlighted by elevated interest rates and higher energy prices from the War in Iran. That said, the current restructuring environment has seen fewer large-scale distress situations. With the cycle cooling, analysts are recalibrating their forward assumptions.
Furthermore, the weakness wasn’t isolated to restructuring, as revenue for Houlihan’s Corporate Finance and Valuation Advisory segments also came in below expectations:
· Q4 Corporate Finance revenue: $433.8M vs. $448.8M expected
· Q4 Valuation Advisory revenue: $91.5M vs. $95.5M expected
When every major business line misses estimates, analysts tend to assume the softness is macro-driven and likely to persist.
Management’s Tone Adds to the Pressure
Even though Houlihan still delivered a record fiscal year, management struck a noticeably cautious tone about the near-term environment, citing “uncertainty” as the firm enters its FY27. When leadership signals hesitation on top of recent quarterly underperformance, analysts usually trim their outlook.
Analysts Respond With EPS Cuts
As shown below, Houlihan’s EPS revisions are starting to decline across the board, highlighted by what is now a 12% drop in Q1 earnings estimates over the last 60 days and a 4% drop in full-year FY27 earnings estimates.
What investors may also want to keep in mind is that while Houlihan stock is trading at a reasonable 17X forward earnings multiple, this is a sharp premium to its Zacks Financial-Miscellaneous Services Industry average of 10X, with other noteworthy peers being American Express (AXP), Coinbase (COIN), and LendingClub (LC).
Bottom Line
Houlihan Lokey remains a high-quality financial investment bank with a strong long-term track record, but the trend of declining EPS revisions suggests short-term weakness is still ahead.
Until analysts see stabilization or a pickup in dealmaking or restructuring activity, Houlihan's stock is likely to remain under pressure after falling nearly 20% in the last six months.
Additional content:
3 Midstream Stocks That Can Ride Out Iran Uncertainty
The overall stock market is now experiencing uncertainty stemming from the Iran war, although media reports claim that the United States and Iran have reached a tentative ceasefire extension deal, which is awaiting U.S. President Donald Trump's approval. Oil and natural gas prices, which are highly exposed to the conflict, are making the energy sector volatile. It is now likely that investors, mostly of whom are risk-averse, are looking for stocks that can sail through the uncertainty.
The uncertainty and volatility are reflected in the price of West Texas Intermediate ("WTI") crude, which recently crossed $100 per barrel and is now hovering around $87. This shows how the war is affecting the energy market. However, not all stocks are being affected by the war-induced uncertainty. Three midstream players like Kinder Morgan, Inc., MPLX LP and The Williams Companies, Inc. are now well-poised to gain. Let's delve deeper.
Midstream Business: Resilient to Business Uncertainty
Stocks in the midstream space have lower exposure to volatility in commodity prices than oil and gas producers. This is because midstream players generate stable fee-based revenues since the transportation and storage assets are being booked by shippers for the long term. Hence, their business model is relatively low-risk, which indicates considerably less exposure to oil and gas prices and volume risks.
3 Pipeline Stocks to Gain: KMI, MPLX & WMB
Kinder Morgan: With its operating interests in oil and gas pipeline networks spread across 78,000 miles, KMI is a leading energy infrastructure company in North America. It derives most of its earnings from take-or-pay contracts, generating stable fee-based revenues.
The midstream energy major, carrying a Zacks Rank #2 (Buy), is likely to grow on the back of its business model, which is relatively resilient to volume and commodity price risks. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
MPLX: MPLX's midstream business comprises transporting crude oil and refined products. The partnership generates stable cash flows from its long-term contracts with the shippers. Its crude oil and natural gas gathering systems also generate stable fee-based revenues. Currently, the stock carries a Zacks Rank #3 (Hold).
The Williams Companies: The company is well-poised to capitalize on the mounting demand for clean energy since it is engaged in transporting, storing, gathering and processing natural gas and natural gas liquids.
With its pipeline networks spread across more than 30,000 miles, The Williams Companies, with a Zacks Rank of 3, connects premium basins in the United States to the key market. WMB's assets can meet a considerable proportion of the nation's natural gas consumption, which is utilized for heating purposes and clean-energy generation.
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Williams Companies, Inc. (The) (WMB): Free Stock Analysis Report
Micron Technology, Inc. (MU): Free Stock Analysis Report
Kinder Morgan, Inc. (KMI): Free Stock Analysis Report
MPLX LP (MPLX): Free Stock Analysis Report
Houlihan Lokey, Inc. (HLI): Free Stock Analysis Report
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