Sept. 30 Could Be the Start of a New Paradigm for Micron

Micron Technology (NASDAQ: MU) has a major event coming up that could shift market sentiment toward its stock. On Sept. 30, it will deliver its fiscal 2026 fourth-quarter results, and what it says could create a new paradigm for the stock.

The market has long recognized that Micron was a cyclical company. The state of the memory chip business fluctuates significantly as demand rises and falls, and as producers' moves to add capacity during tighter markets lead to oversupply conditions later. However, there has never been a demand wave as large as the one currently underway -- thanks to the AI build-out, all the available production capacity for every chipmaker involved in the memory space has been presold.

As Wednesday's announcement will be Micron's fiscal 2026 Q4, it may issue guidance for fiscal 2027 that could shock the market and send the stock price soaring.

Image source: The Motley Fool.

The AI build-out is expected to last for many years

Historically, waves of elevated memory chip demand come along every so often, and they usually only last for a few years. The one being driven by the AI build-out is different.

What we're experiencing right now is the greatest demand for computing power humanity has ever seen, and the types of processors being deployed require an incredible amount of memory to operate efficiently -- particularly high-bandwidth memory (HBM). Currently, the available supply isn't even close to meeting demand, although all three major providers, including Micron, are building new foundries to boost production capacity.

While some of these projects are slated to finish over the next few years, there will be questions about whether this is enough, as data center build-outs are only expected to continue to ramp up for at least the next four years.

Nvidia (NASDAQ: NVDA) estimates that this year, the big five AI hyperscalers will spend nearly $800 billion on data center build-outs. In 2027, they estimate that figure will rise to $1.3 trillion. Ultimately, Nvidia predicts that global data center capital expenditures will rise to between $3 trillion and $4 trillion in 2030. That means demand will remain elevated for memory chips too, as Micron's chips go into Nvidia's GPUs, among other computing units.

The problem is that the market isn't pricing Micron stock as if it expects this spending trend to last. Right now, Micron trades for a mere 6.8 times fiscal 2027 earnings projections.

MU PE Ratio (Forward) data by YCharts.

If this demand wave lasts beyond next year, Micron stock could deliver incredible returns. And considering that one of the most well-connected businesses in the AI build-out has consistently told investors that there are still several more strong years ahead, I think Micron is a no-brainer buy at these prices. Investors may want to get into the stock before Sept. 30, because come Oct. 1, the market could start to find a new paradigm for valuing Micron.

Keithen Drury has positions in Nvidia. The Motley Fool has positions in and recommends Micron Technology and Nvidia. The Motley Fool has a disclosure policy.