Prediction: 1 Semiconductor Stock That Will Be Worth More Than Micron by 2028

Micron Technology (NASDAQ: MU) is the latest AI semiconductor stock to join the $1 trillion club. The memory chipmaker has been one of the hottest stocks over the last 12 months, climbing nearly 800% as of this writing. And some analysts think the stock can continue climbing higher from here.

But investors may be better off buying a different semiconductor stock. A giant in its own right, it's already worth about $650 billion. Investors could find that the company is worth more than Micron by 2028.

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Can Micron keep climbing from here?

Micron's share price has been driven higher by excellent financial results, primarily thanks to its pricing power in memory chips. Momentum has also helped push the stock price higher, as investors don't want to miss out on the megatrend.

There's a severe shortage in memory chips right now, as demand for high-bandwidth memory (HBM) has increased substantially over the last year. HBM chips attach directly to GPUs and other AI accelerators, alleviating one of the biggest bottlenecks in AI inference (reading and writing data). The building blocks of HBM are DRAM chips, and a single HBM package can contain up to 16 DRAM dies (the wafers on which the memory chips are etched). That's created a huge step up in capacity demands.

It takes a long time to set up new cleanrooms and build all new chip manufacturing facilities, so with the supply/demand imbalance, Micron has been able to raise prices significantly. Management says its DRAM pricing increased in the mid-60% range sequentially last quarter, resulting in 207% year-over-year revenue growth for the segment.

But additional capacity is coming. Not just from Micron but also from its competitors. The supply constraints should ease starting in 2028. At that point, analysts expect earnings to peak, and Micron should see a sharp decline in earnings by 2029.

That's the cyclical nature of the memory chip industry. Micron's trailing P/E at past earnings peaks has ranged from about 3 times earnings to 8 times earnings. Analysts currently estimate Micron's full-year 2027 earnings per share to reach $106 before falling slightly for the full-year 2028. Earnings should peak at some point in mid-2028. Based on current expectations, Micron's stock price could fall considerably between now and 2028 unless it significantly outpaces earnings expectations. I estimate the stock will be worth about $517.50 by 2028 based on a P/E ratio of 4.5 at its peak. That's nearly half its current price, and it would give the company a market cap of less than $600 billion.

The semiconductor giant that could pass Micron

Micron and its competitors aren't the only chipmakers building out production capacity. Practically every foundry in the world is building new facilities and buying new equipment to print more chips. That puts equipment suppliers in a very advantageous position, and one of the best options for investors right now is ASML (NASDAQ: ASML).

The company specializes in assembling lithography machines, which print transistor patterns on silicon wafers. Its extreme ultraviolet machines are used for the most advanced chips in production, while its deluxe ultraviolet technology is used for older, less advanced chips (such as memory chips).

ASML machines have a long lifespan, but the company can generate growing recurring revenue through service agreements. Install base management generated 2.5 billion euros last quarter, up 17% year over year. That's despite unit sales for the period dropping compared to last year.

ASML has a good line of sight to revenue acceleration going forward. "Our customers are accelerating their capacity expansion plans for 2026 and beyond, supported by long-term agreements with their customers," CEO Christophe Fouquet wrote in the company's first-quarter earnings release. Indeed, many large foundries have expressed plans to increase planned capital expenditures over the next few years.

At its investor day in 2024, management guided for revenue between 44 billion euros and 60 billion euros by 2030. It's set to blow past those targets, though. Management's latest guidance was for 2026 revenue to come in between 36 billion euros and 40 billion euros. It should surpass the low end of its 2030 guidance by next year with continued acceleration into 2028 as AI demand pushes capacity expansion further.

ASML stock's P/E ratio typically cycles between 24 and 60. If it maintains an average P/E of around 36 in 2028, the stock would trade at about $1,825 based on analysts' estimates. That's only 8.5% upside from its current share price. However, if the company shows continued momentum in unit sales, it could command a much higher multiple as the cycle extends longer, presenting further upside. At a share price of $1,825, the company's market cap would top $700 billion.

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