Micron Technology (MU +0.92%) stock isn't showing any signs of slowing down, even after jumping a whopping 239% in 2025, as shares of the memory specialist have shot up more than 50% this year already.
Micron's incredible rally is fueled by a favorable memory market environment, where demand is exceeding supply thanks to data centers, smartphones, personal computers (PCs), and other applications. Micron's future seems bright despite the stunning gains it has clocked in the past year.
Let's look at the catalysts that could help this semiconductor stock jump higher in the coming year.
Image source: Micron Technology.
Micron Technology is poised for incredible earnings growth this year
Demand for memory chips has been outpacing supply. The undersupply has led to a notable increase in memory chip prices. Market research firm Gartner predicts a 47% increase in the price of dynamic random-access memory (DRAM) this year, which produced nearly 80% of Micron's revenue in the previous quarter.
NASDAQ: MU
Key Data Points
DRAM is widely used in data centers, smartphones, and PCs to enhance computing power, as it enables these devices to quickly read and write data to perform processing tasks. Meanwhile, the contract price of storage-oriented NAND flash memory is anticipated to jump by 55% to 60% in the current quarter, up from an earlier estimate of 33% to 38%, according to TrendForce.
Flash storage prices could keep rising throughout 2026 due to strong demand from data centers and other devices, as artificial intelligence (AI) drives the need for both compute and storage memory chips. All this explains why analysts have substantially increased their earnings expectations for Micron for both the current and next fiscal years.
MU EPS Estimates for Current Fiscal Year data by YCharts
For comparison, Micron posted $8.29 per share in earnings in fiscal 2025 (which ended on Aug. 28, 2025). So, Micron's earnings are poised to jump by over 5x in just two years. The valuation clearly indicates that this semiconductor company's growth potential isn't completely priced into its stock price just yet. That could pave the way for Micron to sustain its red-hot rally.
The stock's phenomenal rally is sustainable
We have seen that Micron stock has made investors significantly richer in the past year. Even now, it is trading at just 13 times forward earnings estimates, which is half of the Nasdaq-100 index's forward earnings multiple (using the index as a proxy for tech stocks).
Let's say Micron is trading at 20 times earnings by the end of fiscal 2027 (which will end in August next year) and achieves $43.54 per share in earnings (as seen in the chart above), that would put its stock price at $871. That's almost double its current stock price, indicating that this AI stock has room to run even higher.
