CHONGQING, CHINA – JUNE 27: In this photo illustration, the logo of Micron Technology, Inc. is displayed on a smartphone screen in front of a stock chart showing recent trading activity of the company’s shares (NASDAQ: MU) on June 27, 2025 in Chongqing, China. (Photo illustration by Cheng Xin/Getty Images)
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Micron Technology stock (NASDAQ:MU) has increased approximately 80% from about $87 at the beginning of 2025 to nearly $157, reaching all-time highs in the process. So, what is driving this increase for Micron? It all revolves around the demand for AI infrastructure, which is boosting sales of high-bandwidth memory products, also referred to as HBM. Even after this substantial rally, Micron stock is valued at about 20× estimated earnings for 2025. Projected growth looks robust: expected revenues are set to rise by 48% this fiscal year, based on consensus estimates, while growth is anticipated at roughly 31% for FY’26. Given this strong growth paired with a reasonable valuation, could Micron stock potentially double to around $300? Below, we outline this scenario.
Surging HBM Demand
Demand is being propelled by the swift adoption of generative AI, which necessitates high-performance memory to function at scale. While DRAM offers capacity, HBM supplies the bandwidth and low latency required for large language models. Micron serves as a primary supplier for Nvidia’s (NASDAQ:NVDA) Blackwell GB200 platform, alongside AMD’s Instinct MI350 series GPUs. The memory requirements for each AI system are also escalating: for example, Nvidia’s latest Blackwell systems feature 33% more memory per node compared to earlier-generation chips.
Additionally, as AI models transition from being text-only to incorporating multimodal formats such as video and speech, memory intensity is on the rise. With AI expected to be broadly adopted throughout the economy, Micron is positioned for a prolonged growth trajectory. To illustrate the scale of the investments, Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOG), Microsoft (NASDAQ:MSFT), and Meta (NASDAQ:META) have indicated that they could collectively invest $364 billion in capital expenditures for their respective current fiscal years.
However, supply may not keep pace easily. Manufacturing HBM is more intricate than standard DRAM, and supply levels are still constrained. The production of HBM is wafer-intensive — it requires approximately three times as many wafers as standard DRAM to create the same quantity of bits due to its lower bit density and intricate 3D stacking. This forms a natural bottleneck. Although Micron has been expanding its HBM production capacity, output for 2025 is already sold out, with robust demand anticipated in 2026. Micron aims to significantly increase its HBM market share, targeting about 20 to 25% of the HBM segment by the end of 2025. Beyond HBM, Micron remains the sole volume producer of low-power DRAM for data centers, providing an advantage as AI workloads increasingly emphasize efficiency.
How Micron Stock Can 2x
Looking forward, even after this increase, Micron does not appear to be overvalued. Its revenues surged by 58%, from $21 billion in 2023 to $34 billion in 2024, as the company rebounded from a downturn. Consensus forecasts indicate revenues climbing from roughly $25.1 billion in FY’24 to $37.1 billion in FY’25, and by about 31% to $48.7 billion in FY’26. HBM has been a significant factor in this growth, with HBM revenue achieving a $6 billion annualized run rate and a projected $10 billion run rate by 2026. Increased HBM production does place pressure on conventional DRAM supply, contributing to rising DRAM prices, which may also enhance revenues for products outside of HBM.
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If we project a slightly more conservative annual growth rate of 25% between FY’26 and FY’28, Micron could generate approximately $77 billion in revenues by FY’28. Micron’s net margins were around 20% over the first nine months of this year. It is possible that this figure could grow further due to a higher proportion of higher-margin HBM chips and improved economies of scale. Assuming net margins rise to about 22% in FY’28, this would equate to net income of approximately $17 billion. With a forward P/E ratio of about 20x, this would imply a market cap of around $340 billion, suggesting the stock price could nearly double from current levels.
Competition And Risks
That said, competition persists. SK Hynix continues to dominate the HBM market with an approximate 50% share and an advantage in production, particularly regarding HBM4. Micron is increasing HBM3E production and testing HBM4, but it is still striving to catch up. HBM4 is anticipated to power Nvidia’s upcoming Rubin architecture for AI accelerators. The memory market has also historically been subject to significant cyclical behavior, and Micron is no exception.
DRAM and NAND remain vulnerable to fluctuations in supply and demand along with pricing volatility. At this time, it appears that HBM serves as a partially secular growth driver, with AI infrastructure investments, high profit margins, and strong order visibility providing some degree of protection. Nevertheless, HBM presently comprises less than 20% of total revenues, meaning the company is not entirely insulated from traditional market cycles. Furthermore, AI demand may normalize following years of heavy investment if shareholders start demanding superior returns and more efficient capital management.
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