Micron Stock Price Could Soar Past $2,000 in 2027 as AI Demand Rises

Micron Technology's stock has cooled off this summer after rising over 1,000% in the last three years. The company's earnings are expected to continue growing through 2027 if artificial intelligence (AI) infrastructure players balance their investments. Micron's memory chips are a key input for AI applications and the demand for them is likely to rise with projected spending growth from companies like Amazon, Alphabet, and Space Exploration Technologies.

The company's revenue grew 346% year over year to $41.5 billion last quarter, making it one of the fastest-growing businesses in the world. Micron has its customers captive, with no alternatives except South Korean memory chip providers, which are facing shortages at the moment. This means that if AI infrastructure players want to keep up in the AI race, they will need to pay whatever price is necessary to buy AI chips.

The math behind Micron's potential stock price targets suggests that the company's revenue could reach $250 billion by 2027 and its operating earnings could reach $200 billion. Using Micron's current operating margin of 80%, investors may want to value the company at least 11 times its earnings power, implying a market cap of $2 trillion or more.