Micron Stock Has Surged 637% in a Year. History Has a Clear Answer Where It Will Be in 2027

The exponential growth in earnings registered by Micron Technology (NASDAQ: MU) over the past year has translated into solid gains on the stock market, with shares of the memory giant up by a whopping 637% during this period.

The incredible demand for memory and the accompanying shortage of dynamic random-access memory (DRAM) and NAND flash storage have fueled the company's remarkable surge. Micron stock has benefited from a parabolic jump in memory prices. You may now be wondering if this high-flying chipmaker can continue skyrocketing.

The good news is that it can indeed sustain its red-hot rally well into 2027. To see why that's likely to be the case, we will need to take a closer look at the primary catalyst that has sent this semiconductor stock soaring over the past year.

Image source: Micron Technology.

Rising memory prices have fueled Micron's rally, and the trend is here to stay

Artificial intelligence (AI) data centers need faster compute memory and ample storage to run training, inference, and agentic AI workloads efficiently. As a result, the demand for DRAM and NAND flash memory has taken off. High-bandwidth memory (HBM), in particular, has created a huge supply shortage as it requires three times the wafer capacity needed to manufacture conventional DRAM, according to Bank of America.

HBM is critical in AI accelerators, enabling the rapid transport of large data sets with low power consumption. Chip designers have been packing in more HBM into custom processors, graphics cards, and even server processors to ensure these chips don't sit idle. Not surprisingly, the HBM market is anticipated to grow by a whopping 7x by 2030, generating $246 billion in revenue by the end of the decade.

However, the booming demand for HBM has created a ripple effect across the memory industry. The wafer-intensive nature of these chips has created a shortage of traditional DRAM and NAND flash, as memory makers have been prioritizing HBM production to increase profits. This is why NAND flash prices nearly doubled over the final six months of 2026, according to Taiwan-based Phison, which manufactures NAND flash controllers.

Meanwhile, DRAM prices reportedly surged 170% last year, according to a third-party estimate. This historical trend of higher memory prices has been the primary catalyst behind Micron's astronomical jump, and there is ample evidence that prices will strengthen further, leading to more upside in this semiconductor stock.

SK Hynix, for instance, expects the memory crunch to worsen next year, even after capacity additions. As demand continues to outpace supply, prices should ideally continue rising. Market research provider Gartner projects a 125% spike in DRAM prices this year, while NAND flash could see a stronger jump of 234%.

If the supply crunch indeed worsens, Micron investors can expect further growth in earnings and margins on account of stronger pricing following a strong jump over the past year.

Data by YCharts

A solid spike in earnings suggests more upside in 2027

Micron's earnings are expected to increase by nearly 9x in the current fiscal year to $73.44 per share, according to consensus estimates. The company's fiscal 2026 will end next month. For fiscal 2027, which ends in August next year, analysts expect its earnings to more than double.

Data by YCharts

While that represents a slower increase from fiscal 2026 levels, the projected earnings growth for next year is still quite impressive. Of course, Micron can clock stronger earnings growth for the reasons discussed above, but even the projected bottom-line jump points to significant upside.

Micron trades at 22 times trailing earnings right now. That's higher than the stock's three-year median price-to-earnings ratio of 14.5, as per YCharts. Assuming Micron trades at 14.5 times earnings after a year and clocks $153.74 in earnings per share, its stock price could jump to $2,229. That's a potential upside of 2.8x in just over a year.

So, this AI stock seems primed for another multibagger performance over the coming year, suggesting that savvy investors should consider buying it following its recent dip.

Bank of America is an advertising partner of Motley Fool Money. Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool recommends Gartner. The Motley Fool has a disclosure policy.