The astounding 313% gains that shares of Micron Technology (MU 2.98%) have clocked over the past year have brought the company's market capitalization to around $463 billion, a big increase from the $100 billion-plus level a year ago.
The stunning rise in Micron stock is justified by the phenomenal jump in the company's revenue and earnings, driven by favorable memory market conditions. Importantly, the conditions that are driving Micron's incredible growth are likely to persist for the rest of the year, potentially pushing the company's market cap to $1 trillion.
Let's look at the reasons why Micron could achieve that milestone by the end of 2026.
Image source: Micron Technology.
Memory price increases are showing no signs of slowing down
The artificial intelligence (AI)-fueled demand for memory chips has created a supply shortage, leading to a sharp price increase. Tom's Hardware reported last month that data centers are on track to consume 70% of the memory chips that will be manufactured this year. What's more, memory manufacturers are reportedly selling their 2028 capacity right now, indicating that the shortage is likely to persist.
NASDAQ: MU
Key Data Points
This massive demand from data centers isn't surprising, as memory is a critical component deployed in AI accelerator chips to reduce bottlenecks and ensure that the chip systems perform up to their potential. Smaller or slower memory could hinder the performance of chips tackling AI workloads, which explains why demand for specialized memory chips such as high-bandwidth memory (HBM) is taking off.
Memory manufacturers like Micron are allocating their supply toward data centers to meet the incredible demand, leaving a shortage in other areas such as smartphones, personal computers, and automotive. What's more, companies investing hundreds of billions of dollars in AI data center infrastructure are not shying away from paying a premium to secure access to memory chips.
As a result, S&P Global expects the contract price of dynamic random access memory (DRAM), which produced almost 80% of Micron's revenue last quarter, to increase by 70% to 100% in 2026 from last year's levels. All this explains why Micron's earnings are expected to grow astronomically in the current and next fiscal years, paving the way for a big jump in the stock price.
Why a $1 trillion valuation seems achievable by the end of the year
Consensus estimates are projecting a 306% increase in Micron's earnings in the current fiscal year to $33.73 per share. Micron's bottom line jumped by 167% year over year in fiscal Q1 2026 (which ended in November last year), and it expects a bigger jump of 440% in the current one to $8.42 per share.
Micron's fiscal year will end in August. So, Micron's earnings in the last three quarters of the current fiscal year are likely to land at $28.95 per share (calculated by deducting the fiscal Q1 earnings of $4.78 per share from the fiscal 2026 consensus earnings expectation). Analysts expect Micron's earnings to land at $43.41 per share in fiscal 2027, translating into a quarterly run rate of $10.85 per share.
Adding Micron's earnings for the last three quarters of fiscal 2026 to the first quarter of fiscal 2027 (which will end in November this year) points to total earnings of $39.80 for roughly this calendar year. Multiplying that by the tech-laden Nasdaq-100 index's forward earnings multiple of 25 indicates that Micron stock could trade at $995 by the end of 2026, which is 2.4 times its current stock price.
That would be enough for this AI stock to enter the $1 trillion club.
