Key Points

• Micron Technology is one of the world's top suppliers of high-bandwidth memory (HBM) for data centers.

• Micron can dictate prices due to the global shortage of HBM, which is significantly boosting its revenue and earnings.

• Micron stock looks like a bargain, but there's a reason investors aren't willing to pay more right now.

• 10 stocks we like better than Micron Technology ›

Micron Technology (NASDAQ: MU) is one of the world's top suppliers of high-bandwidth memory (HBM) for data centers, which is a critical part of the artificial intelligence (AI) hardware stack. There is a global shortage of memory right now, so the company can dictate prices, which has been fantastic for its financial results.

But Micron stock closed at $977.41 on Thursday, Sept. 10, a 19% discount to its June all-time high. Investors are increasingly concerned about the sustainability of the data center spending boom because costs are rising so fast that many large organizations are limiting their AI usage to prevent budget blowouts.

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Micron can ease some of those concerns when it releases its financial results for its fiscal 2026 fourth quarter (ended Aug. 31) after the market closes on Sept. 30. According to management's guidance, the company's revenue and earnings likely continued to grow at an explosive rate.

Will Micron stock soar to a fresh high and potentially surpass the $1,500 milestone after the report?

Memory is critical for AI workloads, but costs are piling up

Graphics processing units (GPUs) are the primary data center chips used in AI training and inference workloads. High-bandwidth memory stores information in a ready state so it can flow seamlessly to each GPU; without it, there would be bottlenecks that cause AI agents, chatbots, and other software applications to deliver a laggy user experience.

Micron recently started shipping its HBM4 solution for the data center, which offers up to double the bandwidth of the company's previous generation, while consuming around 20% less energy. That is why Nvidia is using it in its new Vera Rubin GPU systems.

Although demand for HBM is outstripping supply by a wide margin right now, costs are rising so quickly that they're affecting the economics of deploying AI software. Nvidia says the five largest hyperscale companies (such as Microsoft and Amazon) will spend $800 billion on AI infrastructure this year, and then a further $1.3 trillion in 2027. They have to recoup that money somehow, otherwise the spending won't make sense.

As a result, Microsoft recently implemented price increases for some of its AI software products, like Copilot for Github. AI start-up Anthropic also adjusted how it calculates token consumption when customers are using its models and software tools, resulting in higher costs. Uber Technologies actually blew through its entire 2026 AI budget in just four months while using Anthropic's Claude Code product.

Companies like Uber, Amazon, Walmart, and AT&T have each imposed restrictions on AI usage for their employees to prevent cost blowouts. But they aren't alone, because a recent survey by UBS Group found that 60% of businesses are routing tasks to cheaper, more efficient AI models to save money. These models consume less computing power, which isn't great for GPU or HBM demand in the long run.

Micron could report a blockbuster set of results on Sept. 30

Fortunately for shareholders, the recent AI jitters have yet to show up in Micron's financial results. The company generated $41.4 billion in total revenue during its fiscal 2026 third quarter (ended May 28), a whopping 346% increase from the year-ago period. All four of its business units grew by a triple-digit percentage, thanks to AI-related sales.

Moreover, Micron's earnings exploded higher by 1,368% to $24.67 per share during the third quarter, as the supply-demand imbalance for memory significantly boosted the company's profit margins.

Management's guidance suggests Micron's revenue likely grew by 341% year over year to $50 billion during the fourth quarter, while its earnings are expected to have soared by 985% to $30.73 per share. Wall Street's average estimate (provided by Yahoo! Finance) also suggests Micron could issue a $56.6 billion sales forecast for the fiscal 2027 first quarter.

If the official results on Sept. 30 exceed those estimates, it would certainly be bullish for Micron stock. But if they come in lighter than expected, it could be an early sign that demand is starting to slow, which might result in a sell-off.

Will Micron stock hit $1,500 after Sept. 30?

Based on Micron's trailing 12-month earnings of $44.23 per share, its stock trades at a price-to-earnings (P/E) ratio of just 22.1. Therefore, it's cheaper than both the S&P 500 and Nasdaq-100 indexes, which have P/E ratios of 23.6 and 34.2, respectively.

Plus, Wall Street thinks the company will grow its earnings to $155.03 per share in fiscal 2027, placing its stock at a forward P/E ratio of 6.3. If that estimate proves to be accurate, Micron stock could triple over the next 12 months to around $2,900, and it would still be much cheaper than the broader market.

From that perspective, it appears Micron could easily reach $1,500 per share after Sept. 30, as long as its financial results come in as expected. But investors might be wondering why a company growing as fast as Micron is trading at such a steep discount to the market. It's because Wall Street knows the semiconductor bonanza won't last forever.

I mentioned some of the potential cracks in the demand landscape already, but since every chipmaker is frantically trying to build more manufacturing capacity, the supply shortage could also be resolved within the next couple of years. When that happens, Micron and its peers will lose most of their pricing power, making it very hard to continue matching their current level of earnings.

Therefore, Micron is very hard to value right now. While a stock price of $1,500 is certainly possible, there is no guarantee it will get there.

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Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Micron Technology, Microsoft, Nvidia, and Walmart. The Motley Fool recommends Uber Technologies. The Motley Fool has a disclosure policy.