Micron Technology (MU +0.09%) is riding the wave of the artificial intelligence (AI) revolution. The company sells DRAM (Dynamic Random Access Memory) chips that are critical components powering the AI boom by enabling faster data processing in advanced AI servers and computing systems. Over the past year, Micron's shares have soared 595%, but what if the stock could continue delivering outstanding returns through 2030? Here's the case for Micron's share price reaching $2,000 by 2030, up from its current $861 (as of writing).
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Aggressive assumptions
Micron is benefiting from a shortage of memory chips, which is granting it significant pricing power. The company's most recent financial results look like something out of a dream for the bulls. In the third quarter of its fiscal year 2026, which ended May 28, Micron's revenue was $41.46 billion, up almost 346% compared to the year-ago period. The company's earnings per share (EPS) were $25.11, 1215% higher than the year-ago period. Yet the stock trades at just 5.7x forward earnings.
What gives? The market is betting that Micron won't be able to keep up this pace. The market is right. Growth will slow eventually, but what if it persists longer than many investors assume? Some experts expect the memory chip shortage to last at least until 2028. Further, Micron has signed long-term deals that protect it, at least somewhat, against a catastrophic revenue dip as things slow down.
Assuming Micron can maintain a forward price-to-earnings (P/E) ratio of around 5.7 through 2030, the company's EPS would need a compound annual growth rate of 23.5% for the stock price to reach $2,000.
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Key Data Points
Is that reasonable? In my view, it isn't -- it's too optimistic. For one, the highly cyclical semiconductor industry will likely strike again. We should expect that within the next four years, demand for Micron's products will slow considerably, even with the long-term deals it has signed. The result will likely be much slower EPS growth than our bull case requires. However, there is a silver lining. Micron doesn't need these outrageous returns to be a stock worth holding onto over the next four years.
My view is that its forward P/E likely won't fall much further, and if we assume it stays identical and that its share price will be $1,400 within four years, that will amount to a competitive annualized return of 13% over this period. That requires the company's EPS to grow at the same 13% annualized rate. Can Micron pull that off? While there is significant uncertainty and we should expect a correction at some point, this seems well within the company's reach. The bottom line: The bull case may be too aggressive, but Micron's shares are worth buying, as the stock can still deliver strong returns over the medium term.
