Is Micron Technology Stock About to Join the Exclusive $1 Trillion Club?

The semiconductor industry is currently home to three companies worth $1 trillion or more:

1. Nvidia (NASDAQ: NVDA): $4.8 trillion.
2. Taiwan Semiconductor Manufacturing: $1.9 trillion.
3. Broadcom: $1.9 trillion.

Nvidia designs graphics processing units (GPUs) for the data center, which are the primary chips used in artificial intelligence (AI) development. Broadcom, on the other hand, supplies an alternative called AI accelerators, which can be customized to suit specific AI workloads. Taiwan Semi is the world's largest semiconductor fabricator, and it manufactures chips on behalf of both Nvidia and Broadcom.

But then there is Micron Technology (NASDAQ: MU), a leading supplier of high-bandwidth memory (HBM) for the data center, which is increasingly important in AI workloads. The company is valued at just $540 billion as I write this, but its stock has exploded higher by almost 600% over the past year alone. Is this momentum about to catapult Micron into the exclusive $1 trillion club?

Image source: Getty Images.

There is no AI without memory

GPUs deliver incredible processing speeds, but they need memory to constantly feed them fresh data. Without sufficient memory capacity, GPUs would have to pause their workloads while they wait to receive more information, resulting in very sluggish AI chatbots and agents. There is a major shortage of HBM right now primarily because of its importance to AI.

Micron's HBM3E currently leads the industry, offering 50% more capacity while consuming 20% less energy than competing hardware. However, the company is about to start shipping commercial volumes of its HBM4 solution, which delivers 60% more capacity than HBM3E, with a 30% improvement in energy efficiency.

Nvidia plans to use Micron's HBM4 alongside its new Vera Rubin GPUs, which will lead the industry in terms of performance when they reach customers later this year. This follows the previous successful pairing of Micron's HBM3E solution with Nvidia's Blackwell GPUs.

The market for data center HBM was worth $35 billion in 2025, but Micron believes it could almost triple to $100 billion annually by 2028, so AI has created an enormous financial opportunity in this space. According to Micron's CEO Sanjay Mehrotra, the company's entire 2026 supply of HBM -- including HBM4 -- is already completely sold out.

Explosive sales growth

Micron reports revenue across four business units, which brought in a record $23.8 billion combined during the company's fiscal 2026 second quarter (ended Feb. 26). That was up by an eye-popping 196% from the year-ago period, and it blew away management's forecast of $18.7 billion.

The business unit many investors are focused on right now is cloud memory, which is where the company reports sales of its data center HBM. It generated $7.7 billion in revenue during the second quarter, which represented an increase of 163%. That growth rate accelerated from 100% in the first quarter of 2026 just three months earlier, signaling incredible momentum in what is now Micron's largest segment.

But management's forward guidance suggests the best is yet to come. Micron is expected to deliver $33.5 billion in total revenue during the current fiscal 2026 third quarter, which concludes at the end of May. That would represent a blistering year-over-year growth rate of 260%, and AI-related hardware is likely to be the primary driver of the result.

Micron has a (mathematical) path to the $1 trillion club

Micron is extremely profitable right now, which is a function of its incredible pricing power because demand for HBM significantly outstrips supply. Its earnings soared by 756% to $12.07 per share during the second quarter, taking its trailing 12-month earnings to $21.18 per share. That places its stock at a price-to-earnings (P/E) ratio of just 22.7.

Therefore, Micron stock is currently cheaper than the S&P 500 (SNPINDEX: ^GSPC), which trades at a P/E ratio of 25.4 as I write this. And the chipmaker looks even more attractive based on its future potential -- according to Yahoo! Finance, Wall Street thinks the company will grow its earnings to a staggering $101.07 per share in fiscal 2027, placing its stock at a forward P/E ratio of just 4.7.

In other words, Micron stock would have to rocket higher by a further 382% over the next 18 months just to maintain its current P/E ratio of 22.7. That would catapult the company's market cap to over $2 trillion!

But although Micron looks like a near-certainty to join the trillion-dollar club based on that math, there is a caveat. The reason its stock is so cheap right now is because Wall Street knows memory prices are heavily inflated due to the ongoing supply demand imbalance. When Micron and its peers bring more HBM supply online over the next few years, prices will come down, and so will their earnings.

Therefore, it's very hard to nail down a true fair value for this stock right now. Investors who buy it today might want to use a small position size to keep any potential risks in check, because volatility is likely to be a common theme from here.

Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Broadcom, Micron Technology, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.