The author predicts that Micron (MU) could turn a $10,000 investment made today into nearly $42,000 by 2030, calling this the conservative end of his estimated range. He attributes Micron's strong 2026 performance to soaring memory chip prices, as demand outpaces supply and new capacity takes time to build. Management expects tighter market conditions in 2027 and 2028, and Wall Street analysts project 106% revenue growth for fiscal 2027, which began Sept. 4, and 16% for fiscal 2028, though the author discounts the 2028 forecast. Micron has long-term sales agreements running through 2030 and new fabrication facilities opening in mid-2027 and late 2028. Using $318 billion in fiscal 2027 revenue, 30% annual growth and a 60% profit margin, the author estimates nearly $700 billion in revenue and $419 billion in net income by 2030, implying an $8.4 trillion valuation at 20 times earnings or $4.19 trillion at 10 times earnings.
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Micron's shares have risen 333% over the past 12 months as AI data center clients buy its memory chips, with fourth-quarter revenue up 379% year over year to $54.23 billion and net income up more than 10-fold to $37.7 billion. The company has authorized $35.7 billion in share repurchases, and its forward P/E of 7 compares with an S&P 500 average of 19. The author links the low valuation to a sell-off in South Korea, where the KOSPI has fallen over 40% from its June peak, erasing more than $2 trillion, on fears of rising bond yields and growing competition from China's CXMT. Some South Korean experts forecast a memory chip supply glut by 2029, which the author says could bring years of stagnant performance similar to the period after the dot-com bubble. The author concludes investors shouldn't expect the stock to exceed its current price of $879 by the end of 2027.
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Micron's board raised its buyback authorization to $35.16 billion on Oct. 8, as disclosed in its annual report filed Oct. 9. Almost all of that figure comes from one quarter: the $2.16 billion left under the earlier program plus 100% of the last quarter's adjusted free cash flow after dividends, about $33 billion. The author expects Micron to spend more on buybacks in the next year than the $7.84 billion it spent over the past eight fiscal years, though the authorization does not force purchases and CHIPS Act grant conditions restrict repurchases early on. At a share price near $985, the full authorization would buy only about 35 million shares, roughly 3% of the 1.13 billion outstanding, so the effect on share count and earnings per share may be small. The author still sees the stock as reasonable at about 13 times fiscal 2026 earnings, but says memory prices are likely to drive its next move more than buybacks do.
- Prediction: 2 Stocks That Will Be Worth More Than Micron 5 Years From Now
Micron, with a market cap of about $1.12 trillion, benefits from strong demand for memory chips from AI data centers. The author argues AMD could overtake it, citing a 50% year-over-year rise in second-quarter revenue to $11.5 billion, a 107% jump in data center revenue, and a server processor share of 34.5%, up from 27.3%. The author also believes SK Hynix, with a market cap of about $780 billion, could overtake Micron, given its 50% share of the high-bandwidth memory market versus Micron's 18% and a P/E of 11 compared with Micron's 25. Analysts expect SK Hynix's long-term EPS growth at 82%, versus 65% for Micron. If SK Hynix earns $44.63 per share in 2028 and trades at 15 times earnings, its stock could reach $669, about four times its current price.
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