The stock, trading around $950 per share, has climbed about five‑fold in the last twelve months, reflecting what analysts describe as “phenomenal” earnings growth tied to the artificial‑intelligence surge.
A surge in demand for memory chips, especially dynamic random‑access memory (DRAM), has pushed prices to record highs, prompting Micron and its competitors to adopt a cautious stance on expanding supply capacity.
Micron’s management expects the current severe memory‑chip shortage to persist through 2027, while rival SK Hynix projects the constraint could extend to 2030, underscoring the depth of the supply‑demand imbalance.
Price growth, however, is beginning to slow. TrendForce, a tech‑industry analyst firm, forecasts DRAM prices to rise only 13%‑18% sequentially in the third quarter, down sharply from the 53%‑58% sequential gains recorded in the second quarter.
Analysts anticipate Micron’s revenue to peak in 2028 before entering a sharp decline in 2029 and 2030, with earnings expected to suffer an even larger hit as additional supply capacity raises operating expenses.
Historical cycles show that in Micron’s last downturn revenue fell about 50% from its peak and net income turned severely negative, a factor that now keeps the stock’s price‑to‑earnings multiple at roughly six times next‑year earnings expectations.
The market expects volatility: while a trough in earnings could emerge around 2030, Micron’s stock has historically rebounded quickly once a new earnings upswing is evident, though the path may be marked by significant short‑term losses.