Where Will Micron Stock Be in 2 Years?

Artificial intelligence (AI) data centers require more than just powerful processors. They also depend on enormous amounts of high-performance memory and other data storage hardware to hold and rapidly deliver the massive datasets demanded by complex AI workloads.

In fact, the high-bandwidth memory (HBM) market is projected to grow from around $35 billion in 2025 to around $100 billion by 2028. HBM is a specialized type of DRAM memory; when it’s placed close to GPUs in AI accelerators, it can transfer data to those processor chips at the extremely rapid speeds required when training and running AI models.

Image source: Getty Images.

Micron Technology (MU 2.92%) is well positioned to benefit from this opportunity. As one of the world’s largest suppliers of DRAM and NAND memory chips, it’s seeing rising demand as AI models grow more complex.

AI-powered tailwinds

Memory demand is far outpacing available supply. In fact, during Micron’s latest earnings call, CEO Sanjay Mehrotra claimed that several key customers could only acquire enough to meet half to two-thirds of their needs.

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NASDAQ: MU

Micron Technology

Today’s Change

(-2.92%) $-12.23

Current Price

$406.46

Key Data Points

Market Cap

$471B

Day’s Range

$396.69 - $413.64

52wk Range

$61.54 - $455.50

Volume

904K

Avg Vol

35M

Gross Margin

45.53%

Dividend Yield

0.11%

A key driver of this demand is HBM. Micron has already begun high-volume production of its next-generation HBM4 memory, which delivers a speed of 11 gigabits per second.

Shipment volumes of HBM4 are ramping up in the current quarter, one quarter earlier than previously predicted. All the HBM that it will be able to produce in calendar 2026 has already been sold in advance.

In the face of a widening supply-demand mismatch, customers are increasingly seeking multiyear supply agreements with volume commitments. These factors give Micron impressive long-term revenue visibility.

Additionally, since HBM requires more wafer capacity than traditional DRAM, rising demand is affecting DRAM supply across the industry. The resulting constraints are supporting price hikes even for Micron’s other memory offerings.

Beyond data centers, demand for memory is also increasing in PCs, smartphones, robotics, and autonomous systems.

Micron’s expected growth trajectory in the next two years

Analysts expect Micron’s revenues to be around $78.4 billion in its fiscal 2026 (which ends in August) and $104.5 billion in fiscal 2027. They also expect the company’s adjusted earnings per share (EPS) to be $35.14 in fiscal 2026 and $47.19 in fiscal 2027.

These estimates seem plausible, considering Micron has committed to investing roughly $200 billion into its efforts to expand its U.S. manufacturing capacity over the next few years to support long-term DRAM and NAND memory demand. The company also acquired another DRAM manufacturing site in Taiwan for about $1.8 billion, which will help expand future capacity. Micron could also see improved profitability as its revenue mix increasingly shifts toward higher-priced HBM.

Semiconductor companies have historically traded at an average of 15 to 17 times forward expected earnings. Micron currently trades at 7.9 times forward earnings. Even based on a conservative assumption that its forward price-to-earnings ratio will only expand to around 10 in the next two years, applying that to fiscal 2027 EPS can translate into a share price of $472. This translates into around a 13% increase from its share price as of Wednesday’s close.

A more aggressive scenario assumes Micron’s forward P/E expands to around 15, the level it traded at in the first half of 2024. If that occurred, the company’s share price could reach nearly $708, an increase of 69%.

With all that in mind, Micron appears well positioned to generate a reasonable return for investors.