Where Will Micron Stock Be in 5 Years?

Artificial intelligence chatbots and agents are quickly becoming a normal part of many people's everyday lives, and with their growing usage comes the need for much more AI infrastructure to support their needs for compute power.

And that has spurred a further rush to purchase memory chips for data centers, sending Micron Technology's (NASDAQ: MU) sales and earnings soaring and its share price skyrocketing. It is now up by about 1,010% over the past five years.

What the next five years will look like for Micron stock is difficult to predict. Still, given the company's current position in the memory market and rising demand for memory, its future certainly looks bright. Here's why.

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Micron is in the right place at the right time

One of the key components of AI infrastructure is memory. The quantity of stored data that processors can rapidly access determines how quickly and at what scale AI systems can train and run models. Data centers rely on several types, notably high bandwidth memory (HBM) and conventional dynamic random-access memory (DRAM).

Micron isn't the No. 1 provider in either of these niches, but it does hold impressive market shares -- 18% in HBM and 21% in DRAM, according to Counterpoint Research. Those strong positions have allowed Micron to benefit greatly from the booming memory market. In its fiscal 2026 fourth quarter, which ended Sept. 3, revenue rose 380% year over year to $54.2 billion, and non-GAAP (generally accepted accounting principles) earnings rose by about 1,000% to $33.42 per share.

Micron has seen boom times similar to these before, and that's what has some investors worried. The memory business has always been highly cyclical, so there's reason to think that memory demand could taper off soon, sending memory prices falling back toward where they were before the current shortage. That would mean Micron would lose the highly favorable gross margin (nearly 81%) that it currently has.

But recent comments from fellow memory giant SK Hynix (NASDAQ: SKHY) shed some light on just how short on memory tech companies are, and the efforts they are making to try to secure more of it. The company's management said it has already sold through half of its expected memory production for 2027 and 2028.

Even more impressive is that SK Hynix expects the current level of demand to persist through 2030. That's good news for Micron, too, as it shows that tech companies continue to buy as much memory as they can get.

Bank of America estimates technology companies will more than double their AI infrastructure spending by 2028, boosting it to $2 trillion. When you pair that spending boom with this memory shortage, that's a recipe for continued impressive growth from a company with Micron's strong position in both the DRAM and HBM markets.

It's not too late to buy Micron

Investors are trying to guess when the AI boom will end and when the spending spigots will start to close. That's a legitimate concern, but accurately calling the end of any market cycle is nearly impossible, and doing so now, as tech companies are increasing spending, appears illogical.

Most major tech companies have said they plan to further increase their AI spending next year, and research from Deloitte published earlier this year found that the "memory crunch is greater than expected," and might not ease until 2029 at the earliest.

Predicting where a company and its stock will be in five years is no easy task. But Micron has made deals to sell memory through the next several years, and recently said that 26 of its customers have already signed agreements that account for 35% of its expected 2030 production volume. That means we can assume demand will probably remain elevated over the next few years.

Analysts' consensus estimate puts Micron's earnings per share (EPS) at around $201 in 2030. Of course, that is just an estimate, but it represents a 166% increase from fiscal 2026. To get there would take an impressive compound annual growth rate of about 28%. I think that forecast is a little on the aggressive side, and I'd assume a growth rate of half that (closer to 14%) might be a better assumption, putting EPS around $128 in 2030.

Micron trades at a trailing price-to-earnings ratio of about 10 right now, which is far below the technology sector's average P/E ratio of 32. That means you can pick up Micron's shares at a relative bargain price, despite the company being in the midst of the largest growth cycle in its history. Even if it continues to trade at that lower multiple, with EPS of $128, that would give it a share price of $1,280 in 2030. As of Friday morning, Micron was trading at around $762, so that would amount to a 68% gain. And that's based on my conservative earnings projections. If the analysts' consensus is accurate, or the market starts to bestow higher earnings multiples on memory stocks, the gains in the coming years could be considerably greater.

Bank of America is an advertising partner of Motley Fool Money. Chris Neiger 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.