Micron (MU +0.70%) has been one of the hottest stocks to own over the past year. If you bought it one year ago, you paid about $90 per share. Now it's around $750 per share. However, Micron may not be done producing jaw-dropping results.
Micron is chasing a major growth trend, and it could propel the stock to four-digit levels and beyond. In fact, I wouldn't be surprised if the stock more than doubles from here and reaches $2,000. So what will that take?
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Memory chip demand has reached an all-time high
Micron is one of the primary memory chip producers. While there are several others with significant market share, Micron is one of the more popular investment picks. All computing devices require memory capacity for fast access to stored information. Artificial intelligence (AI) requires a huge amount of memory capacity, and that rising demand is consuming nearly all available memory capacity.
During Micron's latest earnings call, management told investors that it could meet only half to two-thirds of medium-term demand. That's a huge shortage, and restricted manufacturing across the memory industry has led to soaring memory chip prices.
With increased production capacity expected to come online in 2027, prices will stay elevated for a while. However, the AI build-out isn't slowing down anytime soon. Right now, a lot of costs are being sunk into construction, with land and building expenses being high. Soon, that will flip to more compute-focused spending, further increasing demand for high-speed memory chips.
NASDAQ: MU
Key Data Points
Micron expects the total addressable market for its high-bandwidth memory chips (the kind used in AI computing) to expand from $35 billion in 2025 to $100 billion in 2028. That's major growth, and it will allow Micron to continue cashing in on elevated memory chip prices. Wall Street expects Micron's revenue to grow 193% for the remainder of fiscal year 2026 (ending August 2026). In fiscal 2027, it expects 57% growth. Those figures allow us to calculate a 2027 price target.
Micron is also fairly cheap, trading at 13 times forward earnings estimates.
MU PE Ratio (Forward) data by YCharts
Micron appears cheap because it operates in a cyclical industry that could eventually turn against Micron and its peers, so the market hesitates to fully value the stock. However, if the memory chip wave becomes a multi-year trend, Micron may earn a premium valuation.
If Micron could reach a valuation of 20 times forward earnings and grow its earnings at the same rate of revenue in 2027 (57%), Micron's stock could rise to $1,850 by the end of fiscal 2027 (ending August 2027). That could mean a $2,000 stock price by the end of the calendar year 2027, making it an excellent stock to consider investing in now.
