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Adam Levy, The Motley Fool
Sat, May 30, 2026 astatine 1:44 PM CDT 6 min read
Micron (NASDAQ: MU) has been 1 of the biggest winners of the artificial quality (AI) megatrend. Demand for representation chips has soared arsenic representation has proven to beryllium 1 of the biggest bottlenecks controlling the gait of the AI infrastructure build-out. With request for grooming and inference processing powerfulness rising, and with supplies from representation chipmakers limited, sellers specified arsenic Micron person enjoyed tremendous pricing power.
That has resulted successful phenomenal net maturation for the institution successful caller years, and the banal has followed suit. With shares up much than 800% successful the past year, Micron is present a trillion-dollar company. After gains similar that, galore investors whitethorn beryllium wondering if there's inactive clip to buy, oregon if it's clip for those who got successful earlier to instrumentality profits. Here's my prediction for wherever Micron volition beryllium successful 2 years.
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The representation marketplace volition alteration a batch implicit the adjacent 2 years
Micron is 1 of conscionable 3 main manufacturers producing high-bandwidth representation (HBM), a circumstantial benignant of representation spot that is commonly attached to GPUs and different AI accelerator chips. HBM uses aggregate DRAM chips stacked together, and requires importantly much accumulation capableness than different types of representation to nutrient a akin fig of completed chips. But representation chipmakers person been comparatively dilatory to respond to demand, speech from raising prices arsenic overmuch arsenic the marketplace volition allow.
This is successful portion due to the fact that it takes sizeable clip and superior to physique caller spot foundries and outfit them with equipment. Micron's absorption plans to walk $200 cardinal implicit the adjacent respective years to rapidly grow its accumulation capableness and assistance conscionable the soaring request for memory. It expects meaningful proviso enlargement successful 2027 and 2028. Its peers person provided akin timelines for assorted projects aimed astatine expanding their ain accumulation capacity.
Micron's spending volition assistance it capitalize connected the market's demand. However, it has each crushed to enactment cautiously. Many of its customers are placing precocious orders, snatching up arsenic overmuch capableness arsenic they tin present to get up of competitors. The rhythm feeds itself, driving request higher, pushing prices higher, which pushes request higher inactive arsenic customers look to fastener successful prices portion they can. However, immoderate forecasters foretell that proviso volition drawback up to request successful 2028, astatine which constituent pricing would commencement to normalize. At that point, the shortage could easiness and reverse into oversupply. That's particularly existent fixed that 3 companies are each gathering retired monolithic caller accumulation facilities for representation chips. If there's a glut, the effect volition beryllium a important diminution successful their revenues and earnings, arsenic their operating costs volition stay structurally higher with the caller facilities successful operation.
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