Prediction: This Will Be Micron's Stock Price by Late 2027 (Hint: It Implies a Big Move)

Micron Technology's (NASDAQ: MU) stock is up nearly 700% in the past year. The semiconductor company is currently benefiting from an unprecedented supply shortage in memory chips driven by demand for artificial intelligence infrastructure.

I predict Micron stock will hit $1,875 per share after the company reports financial results for fiscal 2027, which will happen sometime in September 2027. That implies about 91% upside from the current share price of $982. Here's my rationale.

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Micron is growing very quickly due to a severe memory chip supply shortage

Micron develops memory and storage solutions for cloud and enterprise data centers, mobile devices and other consumer electronics, and automotive systems. Its portfolio includes dynamic random-access memory (DRAM), high-bandwidth memory (HBM), and NAND flash products. All three types of memory are critical for artificial intelligence.

Micron is not the leader in any category. It ranks as the third-largest supplier of DRAM, it is tied with SK Hynix as the second-largest supplier of HBM, and it is tied with Sandisk as the fourth-largest supplier of NAND, per Counterpoint Research. But Micron is still growing very quickly due to an unprecedented memory chip supply shortage created by demand for AI infrastructure.

Micron reported exceptional financial results for the third quarter of fiscal 2026 (ended in May). Revenue rose 345% as NAND and DRAM prices doubled from the previous year, and non-GAAP (adjusted) net income soared more than 1,200%. Guidance for the current quarter suggests revenue will increase 340% and adjusted net income will soar by more than 900%.

The memory chip industry has historically been defined by boom-and-bust cycles

Memory chips have historically been one of the most cyclical semiconductor industries. The boom-and-bust dynamic works like this: Initially, some catalyst creates more demand than manufacturers can satisfy, driving memory prices higher. But supply eventually catches (and surpasses) demand because manufacturers inevitably produce too many chips, which forces them to cut prices.

Consider what happened during the COVID-19 pandemic: In 2021, memory chip sales surged during the transition to remote work as enterprises invested in cloud infrastructure and consumers bought computers and gaming consoles. But manufacturers oversupplied the market, so NAND and DRAM prices plunged about 70% when enterprise and consumer spending normalized by mid-2023.

Some analysts argue the current memory chip cycle is different, pointing to the 16 multiyear supply deals Micron has signed with customers, which offer some protection from the next downturn. But the four most dangerous words in investing are: This time is different. Several memory chipmakers have more production capacity coming online in 2027, so the imbalance in supply and demand could start closing in 2028.

Why Micron stock could hit $1,875 per share by late 2027

Micron trades at 12.4 times sales. That is a massive premium to the five-year average of 4.7 times sales. Of course, Micron's sales are growing very quickly, so the valuation is arguably justified. But history says the company's sales will drop (perhaps sharply) during the next downturn. For instance, Micron's sales fell 50% in fiscal 2023.

The stock market is forward-looking in nature. Investors will be looking through the cyclical peak in memory chip sales before the peak arrives, contemplating what Micron is worth in a downturn. If investors determine the company could lose substantial pricing power when additional memory chip supply hits the market in 2028, Micron's price-to-sales ratio could contract significantly in 2027.

So, I will assume Micron stock trades at 8.5 times sales in late 2027; I arrived at that figure by splitting the difference between the current valuation and the five-year average. The Wall Street consensus puts Micron's revenue at $250 billion in fiscal 2027 (ends in August). If the stock trades at 8.5 times sales, the company will be worth $2.1 trillion. That implies about 91% upside from its current market value of $1.1 trillion.

In turn, 91% upside implies the stock price will hit $1,875 per share by late 2027, up from $982 per share today. Of course, I made several assumptions to arrive at that prediction, some of which will probably prove incorrect. In particular, the market may afford Micron a lower valuation multiple by late 2027, one that more closely tracks the five-year average.

Trevor Jennewine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool has a disclosure policy.