Shares of Micron Technology (MU 0.80%) have shot up by a staggering 259% in 2026, as of this writing, and it looks like its red-hot rally isn’t going to end any time soon.
The latest catalyst for Micron stock came when it released its fiscal 2026 third-quarter results (for the three months ended May 28) on June 24. The company’s revenue and earnings blew past Wall Street’s expectations, and its guidance for the current quarter was also well ahead of what analysts were looking for.
Let’s take a closer look at Micron’s performance and check why this high-flying artificial intelligence (AI) stock has the potential to jump by over 3x in a year.
Image source: Micron Technology.
The memory boom powering Micron Technology’s phenomenal growth is getting stronger
Micron’s revenue in fiscal Q3 shot up by almost 4.5x year over year to $41.5 billion, miles ahead of the $35.1 billion consensus estimate. Even better, its earnings per share jumped by 13x year over year to $25.11, again crushing the consensus estimate of $20.39 per share.
Today’s Change
(-0.80%) $-9.07
Current Price
$1123.26
Key Data Points
Market Cap
$1.3T
Day’s Range
$1024.00 – $1128.33
52wk Range
$103.38 – $1255.00
Volume
1.1M
Avg Vol
52.1M
Gross Margin
72.60%
Dividend Yield
0.04%
The phenomenal demand for memory and storage chips used in AI accelerators and data centers, and ongoing supply constraints, propelled Micron’s non-GAAP gross margin to 84.9% last quarter, up from 39% in the year-ago period. The company anticipates its gross margin to rise further in the current quarter to 86%.
What’s more, the midpoint of Micron’s revenue guidance of $50 billion points toward another year-over-year increase of 4x in its top line. Meanwhile, its earnings per share are on track to increase by just over 10x to $31.00, according to the midpoint of the guidance range. An important point from Micron’s latest earnings call was that customers are entering into long-term contracts with the company to secure memory supply.
Micron signed 16 strategic customer agreements (SCAs) in fiscal Q3. The company notes that 14 of these SCAs represent a minimum contracted revenue of $100 billion over the remainder of the contract. Additionally, Micron has structured these SCAs as “take-or-pay agreements, with binding commitments to purchase specific volumes over this multi-year term.” So, the buyers will either have to purchase a minimum quantity of memory chips from Micron over the contract term or pay a fee anyway.
These agreements clearly suggest that Micron has finally escaped the boom-and-bust memory cycles that have impacted it in the past. The memory industry is known to be cyclical, with demand dropping during periods of weak smartphone and personal computer (PC) sales, creating an oversupply. This has led to a sharp decline in memory prices in the past.
However, the advent of AI has brought about a structural change in the industry. AI accelerators and edge devices, such as smartphones and PCs, need more compute and storage memory to execute AI workloads. Specifically, the high-bandwidth memory (HBM) used in AI accelerator chips uses up thrice the wafer capacity of traditional memory.
As AI data centers are cornering a major share of the dynamic random-access memory (DRAM) supply, there is a severe shortage of memory chips that’s expected to last until 2030, at least. So, the favorable demand-supply dynamics powering Micron’s growth aren’t going away anytime soon, as evident from the scramble by its customers to secure long-term supply.
The latest earnings forecasts suggest that this high-flying stock has room to multiply
Analysts have significantly increased Micron’s earnings forecasts following its latest quarterly report.
Data by YCharts
The company delivered just $8.29 in earnings per share in fiscal 2025. The forecast for fiscal 2027, as shown in the chart above, indicates a potential 18x increase in the company’s earnings in just two years. Micron could indeed hit that mark, considering the memory industry’s revenue is on track to grow substantially once again next year.
The concurrent supply shortage, meanwhile, will be a tailwind for Micron’s margins and bottom line. So, if Micron’s earnings per share jump to $149.40 in fiscal 2027 and it trades at 26.3 times earnings at that time (in line with the tech-laden Nasdaq-100 index’s forward earnings multiple), its stock price could reach $3,929.
That’s 3.4x Micron’s current stock price, which is why investors should consider buying this growth stock hand over fist, especially given that it trades at just 7.3 times forward earnings.
