The stock price rose an astonishing 313% Micron Technology (NASDAQ:MU) Over the past year, the company’s market value has reached about $463 billion, a significant increase from more than $100 billion a year ago.
The stunning rise in Micron Technology shares comes as the company’s revenue and earnings grew significantly, driven by favorable memory market conditions. Importantly, the conditions that have driven Micron Technology’s incredible growth are likely to continue through the rest of the year, potentially pushing the company’s market cap to $1 trillion.
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Let’s take a look at the reasons why Micron Technology will be able to achieve this milestone by the end of 2026.
Demand for memory chips driven by artificial intelligence (AI) has created supply shortages, causing prices to rise sharply. Tom’s Hardware reported last month that data centers are expected to consume 70% of the memory chips produced this year. What’s more, memory manufacturers are reportedly currently selling production capacity through 2028, suggesting the shortage is likely to persist.
The huge demand in data centers is not surprising as memory is a key component deployed in AI accelerator chips, reducing bottlenecks and ensuring chip systems reach their potential. Smaller or slower memory can hinder the performance of chips handling artificial intelligence workloads, which explains why demand for specialized memory chips like high-bandwidth memory (HBM) is taking off.
Memory makers like Micron are allocating their supply to data centers to meet the incredible demand, causing shortages in other areas such as smartphones, PCs and cars. What’s more, companies investing hundreds of billions of dollars in AI data center infrastructure don’t shy away from paying extra to ensure secure access to memory chips.
As a result, S&P Global expects contract prices for dynamic random access memory (DRAM), which accounted for nearly 80% of Micron’s revenue last quarter, to increase 70% to 100% by 2026 from last year’s levels. All of this explains why Micron Technology’s earnings are expected to grow at astronomical levels in the current and next fiscal years, paving the way for a significant share price rise.
