Micron Technology Has Started 2026 With a Bang. The Stock Could Still Triple This Year

Core Viewpoint - Micron Technology has sold out its high-bandwidth memory (HBM) capacity for 2026, indicating strong demand and pricing negotiations have been completed for the year [1][2]. Group 1: Financial Performance and Projections - Micron is expected to achieve a significant year-over-year earnings growth of 440% in the current quarter, projecting non-GAAP earnings of $8.42 per share [3]. - Analysts forecast Micron's earnings to reach $32.22 per share for the fiscal year ending August 2026, nearly quadrupling from the previous year [9]. - The fiscal 2027 earnings estimate stands at $39.39 per share, suggesting a potential earnings of $37.29 per share over the next four quarters [10]. Group 2: Market Dynamics - A supply shortage in the memory chip market has led to a price increase, with forecasts indicating a 20% to 25% sequential jump in DRAM prices for the current quarter [3][4]. - The demand for memory chips, particularly from data centers for AI workloads, has outstripped supply, contributing to rising prices [4][6]. Group 3: Stock Performance and Analyst Ratings - Micron's stock has surged 247% over the past year, with a notable increase of over 10.5% on the first trading day of 2026 [5][6]. - Bernstein analyst Mark Li has raised Micron's price target to $330 from $270, rating the stock as "outperform" [5]. - The stock is currently trading at 9 times forward earnings, with projections suggesting it could reach a price of $969 by the end of the year, more than triple its current value [11]. Group 4: Strategic Contracts and Profitability - Micron is negotiating multi-year contracts for DRAM and NAND flash storage chips, which are expected to enhance margin terms and ensure strong bottom-line growth [8]. - The non-HBM business is also showing healthy profitability, although Micron can only meet half to two-thirds of the demand from key customers in the medium term [7].