Prediction: Micron Stock Will Hit $1,250 After Sept. 30

Key Points

• Substantial memory chip demand will push Micron higher over the next few years.
• Micron's stock is dirt cheap.
• 10 stocks we like better than Micron Technology ›

Micron (NASDAQ: MU) has been a top stock to own in 2026, but 2026 is far from over. I think after its next earnings results on Sept. 30, there will be a significant rally in Micron's stock that will allow it to achieve fresh all-time highs. Its 52-week high is around $1,250, so that rally would allow it to set a new all-time high shortly after earnings.

Why do I think this will happen? It's all because the artificial intelligence (AI) build-out isn't slowing down; it's speeding up.

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Micron is perfectly positioned to make a fortune

Micron manufactures memory chips, including DRAM and NAND memory. Those are the two primary types of memory used in data centers, with DRAM used inside computing units and NAND used for longer-term storage in devices like solid-state drives (SSDs). The demand from the AI industry for these products to build out a massive computing footprint has far exceeded supply, pushing chip prices higher. Nothing has changed on the input side for Micron, so it makes a fortune for each chip sold.

This shows up in Micron's margins, and its gross and profit margins have never been higher.

With Micron making record-high profits, investors may be worried that a fall-off could be coming. They're right to worry, as Micron's cyclical nature has led to declines in the past. However, what's different this time is the build-out's longevity. The AI buildout is expected to intensify next year. One of Micron's biggest clients, Nvidia, projects that the big five AI hyperscalers will spend nearly $800 billion on capital expenditures this year, rising to $1.3 trillion next year. That's a massive ramp, but Nvidia has also provided guidance for global AI capital expenditure to reach $3 trillion to $4 trillion by 2030.

That means demand for memory chips will remain elevated for some time, but an increase in supply could balance it out.

Micron is working to build out additional production capacity, but those facilities won't be online until mid-2027 to 2028. Its peers are also working to increase supply, which could push prices down to more reasonable levels, but Micron will remain highly profitable during that period because most of its capacity will still be used. Micron's management team has told investors that tightness in the memory chip market won't ease until 2028, so there are still several quarters of elevated profits ahead for Micron.

The environment is fantastic for Micron going forward, but how will that lead to a price spike after its earnings on Sept. 30?

Micron's stock is dirt cheap

The main problem with Micron's stock is that the market views everything stated above with skepticism. This is reflected by Micron's incredibly cheap price tag, which is only 6.2 times forward earnings at the time of this writing.

That low price tag reflects the market's skepticism, but with AI demand looking likely to be long-lived, I think this is an amazing buying opportunity. Investors shouldn't worry about Micron's peak margins declining, as it will still be a fantastic investment even if its margins fall into the 50% range.

This discrepancy is your chance to buy one of the biggest beneficiaries of the AI buildout over the next few years at a huge discount, and investors shouldn't pass it up. I think the market could come to its senses after its next earnings report, and with it coming out on Sept. 30, the clock is ticking before Micron's stock heads higher.

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Keithen Drury has positions in Nvidia. The Motley Fool has positions in and recommends Micron Technology and Nvidia. The Motley Fool has a disclosure policy.