Micron Stock Is Up Over 260%. Here's Why It Could Go Even Higher

Core Viewpoint - Micron Technology is experiencing significant momentum, driven by the increasing demand for high-bandwidth memory (HBM) in artificial intelligence (AI) applications, with a potential for further growth in its stock price [2][4][11] Company Performance - Micron's stock has surged over 260% in the last 12 months, outperforming other AI stocks [2] - Current market capitalization stands at $450 billion, with a price range of $390.76 to $412.22 for the day [3] - The company has a gross margin of 45.53% and a dividend yield of 0.12% [3] Market Dynamics - The total addressable market for HBM is projected to grow from approximately $35 billion last year to around $100 billion by 2028, reflecting a compound annual growth rate of about 40% [6] - Strong demand for HBM is expected to persist, with supply constraints likely continuing beyond 2026 [6][7] Demand Drivers - AI applications are expanding beyond data centers to edge devices, including smartphones and vehicles, increasing the need for memory [3][4] - Developers of large language models are increasing context windows, which require more memory, specifically HBM [4][5] Earnings Potential - Analysts predict that Micron's earnings could nearly quadruple over the next two years due to favorable supply-demand dynamics [8] - The stock is currently trading at 12.5 times forward earnings, with a low price-to-earnings-to-growth (PEG) ratio of 0.7, indicating potential for significant growth [9] Analyst Sentiment - Despite a strong performance, the consensus 12-month price target for Micron is 12% below the current share price, reflecting a cautious outlook among analysts [10] - 37 out of 43 analysts rated Micron as a "buy" or "strong buy," indicating overall positive sentiment despite the lower price target [10]