Micron has emerged as one of the top performers in the recent AI boom, with its shares having climbed more than 260% over the past 12 months. The company’s high-bandwidth memory (HBM) chips, critical for large language models and other AI workloads, are in exceptionally tight supply. Management now expects the HBM total addressable market to grow from roughly $35 billion in 2024 to about $100 billion by 2028, representing a compound annual growth rate of around 40%. Executives have indicated that supply constraints will likely persist through the end of 2026, granting Micron significant pricing power and the ability to lock in multiyear customer commitments.

In the first quarter of fiscal 2026, Micron reported revenue of $13.6 billion, up 57% year over year, and a gross margin near 57%, with management forecasting margin expansion to approximately 68% in the second quarter. William Blair projects that the company’s earnings could nearly quadruple over the next two years, reflecting the combination of surging AI demand and constrained industry capacity. Despite these robust growth expectations, Micron trades at just 12.5 times forward earnings and carries a price-to-earnings-to-growth ratio of 0.7, suggesting that the market has yet to fully price in its accelerating profit trajectory.

Of the 43 analysts covering the stock in a recent S&P Global survey, 37 rate it as a buy or strong buy, yet the consensus 12-month price target remains about 12% below current levels. This divergence may stem from concerns over competitive share shifts—most notably from large peers that could enter the HBM market—and the sector’s historical cyclicality. A slowdown in overall AI adoption or a rapid expansion of industry capacity could pressure memory prices and margins. Investors should monitor announcements from major cloud and hyperscale customers as well as capex plans from rivals for signs of a turning supply–demand balance.