The market for artificial intelligence (AI) processors saw Nvidia become the world's most valuable company, with its market cap even exceeding $5 trillion briefly in late 2025.
But I think the next stage of the AI boom will benefit memory companies the most.
Your computer and an AI program both need random access memory (RAM) and dynamic random access memory (DRAM) to store and recall data. AI needs it to remember and infer from its training data.
And we are currently in a memory shortage that Intel CEO Lip-Bu Tan doesn't think will begin to ease until 2028. Prices for RAM are expected to surge 50% over Q4 2025 prices by the end of Q1 2026.
Micron Technology (MU 3.21%) sits right at the middle of it and you read the headline right: Based on its current price-to-earnings (P/E) ratio and its projected earnings for the end of its fiscal 2026 in August, I could see its share price exceed $1,200.
Here's why.
Image source: Getty Images.
Forgetful robots
Micron's business is pretty straightforward: It designs and produces memory hardware, namely RAM and DRAM. And it is refocusing its business entirely on the AI demand for memory.
It exited the consumer PC memory market in late 2025 and in January 2026, Micron broke ground on a $100 billion semiconductor factory in upstate New York. When completed, the plant will be the largest semiconductor factory in the United States.
What's more, Micron is one of only three large-scale memory producers in the world and the only major American producer of RAM and DRAM hardware. The other two are South Korea's Samsung and SK Hynix.
So, with memory at a premium for the foreseeable future and limited competition, Micron is set for serious growth. But how do we get to $1,200 from the $420 it's trading for right now?
Let's crunch some numbers.
NASDAQ: MU
Key Data Points
2026 should be a year to remember for Micron
First, the company's latest results for Q1 of its fiscal 2026 (reported Nov. 27, 2025) were nothing short of incredible. For the quarter, revenue hit $13.6 billion, up 57% year over year. DRAM, the memory hardware AI prefers in particular, represented 79% of that revenue, demonstrating where Micron's growth is coming from.
And, for that quarter, the company managed a gross margin of 45.3%, an operating margin of 31.8%, and a net margin of 28%. The company also dramatically beat earnings by 20% and the earnings projection for Q2 of Micron's fiscal 2026 is $8.49, almost double the company's actual earnings per share (EPS) for Q1 of fiscal 2026, which was $4.78.
Now, Micron's current trailing-12-month P/E is 39.31, which sounds high, but it's actually fairly low relative to other tech hardware players like Nvidia, which is at 46.27. Here's where my projection comes in.
If we multiply Micron's current P/E ratio of 39.31 by the consensus EPS for its fiscal 2026 of 32.45, we get $1,275.60. If we use the low EPS forecast of 30.28, we get $1,190.30 and the high EPS forecast of 36.24 gets us to $1,424. Even the low-ball estimate is a 183% gain over Micron's current prices.
So, as long as Micron maintains roughly its current P/E ratio and meets or exceeds earnings expectations through 2026, it could potentially exceed $1,200 by the end of August 2026. Even if it doesn't go that high, it's trading rather low relative to its projected earnings.
That makes it worth a look by my math.
