There’s a big question casting a cloud over the incredible bull run that Micron (NASDAQ:MU) stock has enjoyed this year: is this time different? The memory business is notoriously cyclical, with years of plenty followed by much leaner ones.
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This dynamic boils down to a simple case of supply and demand. In the past, thirst for memory products has led Micron and its peers to ramp up production capacity. However, the subsequent supply glut that follows pushes prices back down, leaving MU with nowhere to sit when the music stops.
Bulls offer a strong rebuttal, arguing that the massive AI buildup – and the vital role that high-bandwidth memory (HBM) products play – has changed the contours of the game. According to that rationale, this positive cycle is going to last for quite a bit longer.
Thus far, they seem to be winning. Micron’s most recent earnings release included astounding top- and bottom-line numbers, while its guidance for the current quarter of $33.5 billion (sequential growth of almost $10 billion) left little doubt that the company expects the good times to continue.
That’s where top investor Harsh Chauhan finds himself, and he’s ready to offer a bold prediction:
“Micron stock will skyrocket to $2,000 in 1 year,” declares the 5-star investor, who is among the top 1% of stock pros covered by TipRanks.
Chauhan cites some simple numbers that back up this assertion, including reports that contract prices for DRAM will increase by 58% to 63% in the current quarter and 125% for the full year.
Moreover, the investor also points to estimates that HBM demand for custom AI processors could jump by 35x between 2024 and 2028. While few doubt the hungry demand, Chauhan further explains that manufacturing more supply isn’t that simple.
For instance, the investor notes that a new advanced facility that Micron started construction on this year will only start volume production in a few years, and may not even reach its full production potential for another eight years.
In other words, MU will remain on the winning side of the price equation for awhile longer. Looking at Micron’s expected EPS of $101.78 in fiscal 2027 and assuming a 22x multiple, Chauhan assesses that MU could even surpass $2,000 by next year.
“It isn’t too late for investors to buy Micron stock,” sums up Chauhan. “It could nearly triple in the coming year.” (To watch Chauhan’s track record, click here)
Meanwhile, Wall Street analysts still have plenty of catch-up to do. Micron’s massive rally has pushed the stock about 24% above the $608.33 average analyst price target, faster than many on the Street have been able to adjust their models. Even so, the stock still carries a Strong Buy consensus rating based on 27 Buy recommendations and 3 Holds. (See MU stock forecast)
Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.