While Micron (NASDAQ: MU) stock has experienced a pullback, analysts remain overwhelmingly bullish on the name. Some even liken the stock to Nvidia a few years ago – when it was trading at a fraction of its price today.
If analysts are right, an investment in Micron today could prove to be very lucrative. Here’s a look at some share price forecasts for the memory stock.
Prolific growth amid the AI boom
Micron’s seeing prolific growth. As a key supplier of high-bandwidth memory (HBM) to companies like Nvidia and Google, its revenues and earnings are surging. Last quarter, for example, revenue was $41.5bn, 346% higher than a year earlier. Net income came in at $28.9bn, up 1,223% year on year.
Looking ahead, analysts expect the strong growth to continue. For the financial year ending 31 August 2027, they expect revenue to hit $250bn versus a forecast of $129bn for the current financial year ending 31 August.
The reason growth’s expected to be so strong is that memory has become a crucial hardware component for generative AI systems and demand is very high. Additionally, Micron has pricing power due to the high level of demand.
Price forecasts for Micron
In terms of price forecasts, the average analyst 12-month price target is currently $1,458. That’s around 50% above the current share and if it was to be hit, a $2,913 investment today (three shares at the current share price ignoring trading fees) would grow to around $4,400.
Note however, that numerous firms have price targets that are much higher than this. For example, Barclays and DA Davidson have targets of $2,000 while Melius Research is targeting $2,200.
If the stock was to get to $2,000, three shares would be worth $6,000. If it was to hit $2,200, we are looking at $6,600.
So there could be some big gains on the horizon if analysts’ forecasts come to fruition. Forecasts should never be relied upon though – often they turn out to be way off the mark.
A high-risk/high-reward play
Personally though, I’ve had a nibble at Micron recently. I paid around $900 for my stock.
I see it as a high-risk/high-reward holding. I acknowledge that memory demand has historically been very cyclical and could drop at any time, but I also reckon that demand could remain high in the years ahead as Big Tech companies spend trillions on AI infrastructure.
I’ll point out that my position here is very small. I’ve sized it this way to minimise my risk. I see quite a bit of potential though given the level of growth and the fact that the company’s valuation remains low. In my view, the tech stock’s worth a look as a speculative investment.
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Edward Sheldon owns shares in Micron and Nvidia
