Keithen Drury, The Motley Fool Tue, October 13, 2026 at 2:47 PM EDT 5 min read MU -5.26% NVDA +0.47% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Micron (NASDAQ: MU) may be entering a new paradigm. The company operates in a cyclical industry, but Micron is taking steps to reduce its cyclicality over the next few years. This could transform Micron into a viable investment option and make it well worth buying stock in, as it looks ready to soar over the next few years.
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There has been no shortage of estimates regarding the strength of the artificial intelligence build-out. Some projections come from its peers and clients in the industry, while others come from its own management. During Micron's latest quarterly earnings report, management noted that they expect the "supply demand conditions to be much tighter in FY 2027 and 2028 than they were during 2026." That's a notable statement, as 2026's conditions were pretty tight. This led to soaring memory chip prices in 2026, and it could lead to even more expensive chips in the future.
However, Micron isn't sitting idle. It's racing to build more production facilities and expects its Idaho fabrication facility to begin producing chips in mid-2027, with its second Idaho facility starting production in late 2028. However, Micron still projects that memory chips will be in short supply. So, if Micron can increase its output dramatically while maintaining today's high prices, it could lead to incredible growth for the company. But it's not done there.
Micron is starting to sign long-term customer agreements that are locking in floor and ceiling prices for memory chips through 2030. These are also take-or-pay agreements, so Micron is locking in revenue streams. Some of these agreements extend into 2031, indicating an even longer AI growth trajectory.
One long-term AI growth trajectory projection comes from Nvidia, which has repeatedly told investors to expect $3 trillion to $4 trillion in global AI data center capital expenditures annually by 2030. In 2026, Nvidia expects the big five AI hyperscalers to spend nearly $800 billion. If you estimate what others beyond the big five are spending, it's easy to see total capital expenditures sitting around $1 trillion this year.
So, the AI market could triple by 2030. This has huge implications for Micron, as its stock could be ready to skyrocket.
First off, Micron has hardly any growth priced into its stock for next year. It only trades at 5.6 times forward earnings.
The market is still pricing in a cyclical downturn in the near future, even though Micron has already told investors it won't happen anytime soon. This could lead to the stock at least tripling by the end of 2027, simply by rising to a reasonable valuation. Combine that with the AI market tripling to quadrupling as a whole by 2030, and there is a massive amount of upside baked into the stock.
So, how much could a $2,500 investment in Micron be worth by 2030? If all of the projections stated above come true, when Micron's fabrication facilities come online and start producing a large number of chips as expected, I think investors can expect the stock to grow more than 5-fold. How? First, Micron starts to trade at a reasonable 20 times earnings. I think this is somewhat realistic, as Micron has entered into long-term purchasing agreements with its clients that will reduce the effects of cyclical downturns. As a result, the market will give it a more respectable premium. That takes care of the stock rising about threefold to fourfold.
For the remainder of its growth, I'd point toward Nvidia's projection that data center capital expenditures will triple to quadruple by the time 2030 rolls around. That will mostly be from more computing chips needed, and every computing chip needs memory, potentially sourced from Micron. With that much growth ahead, I think it's pretty reasonable to expect Micron's business to double or triple. That would suggest a $2,500 investment in Micron could be worth $12,500, which makes the stock an absolute no-brainer buy at today's prices.
Micron is taking steps to ensure it isn't as cyclical, and this could make it a strong investment in the AI revolution.
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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.
Here's What a $2,500 Investment in Micron Could Be Worth by 2030 was originally published by The Motley Fool
