Micron Tripled in 2026. Can It Repeat in 2027?

Micron (NASDAQ: MU) stock has more than tripled so far in 2026, making it the fourth-best-performing stock in the S&P 500 (SNPINDEX: ^GSPC) this year. That's an impressive run, but for investors, the past really doesn't matter; only the future.

So, could Micron repeat this feat in 2027? One metric suggests that the answer to that question is yes.

The memory chip shortage is far from over

Micron produces memory chips, which have become some of the most in-demand tech hardware due to their scarcity. The companies that manufacture them were not ready for the massive growth in demand generated by the artificial intelligence (AI) build-out, which has consumed all the supplies they could produce this year.

Memory chips are essentially commodity products. When demand significantly outpaces supply, prices soar -- and that's exactly what happened this year. However, Micron's input costs barely shifted, so the rising prices it can now charge are pure profit, and the stock skyrocketed as investors watched the company's top and bottom lines multiply.

Moreover, this shortage isn't going to end soon.

On the latest earnings call, Micron's management team advised investors that it expects conditions in the memory chip market to be even tighter in 2027 and 2028 than they were in 2026. But Micron has been building new foundry lines in the meantime, and with more production capacity coming online in 2027, it will be able to manufacture more chips to sell at these higher price points, leading to significant additional profit growth.

This is reflected in Wall Street's outlook for the stock. Micron reported $75.52 in earnings per share during its fiscal 2026 (which ended in August), and management estimates Micron will generate a jaw-dropping $176.55 in earnings per share during its fiscal 2027.

Over the past couple of years, Micron's stock has usually traded in the neighborhood of 20 times earnings. Right now, it's a dirt cheap 12 times earnings because the market does not believe that this boom will last. However, its management team, which has access to more information about the tech sector than most investors, has already told anyone who will listen that the conditions leading to high memory demand and insufficient supply aren't going anywhere. As a result, the stock looks undervalued.

MU PE Ratio data by YCharts.

If Micron only meets analysts' expectations for its fiscal 2027, then in order to trade at just 15 times earnings next fall, the stock would have to triple. If it trades at 20 times earnings at that point, then the stock will have quadrupled from here.

The market's bearishness about the long-term outlook for AI spending has investors leaving obvious money on the table when it comes to a stock like Micron. Now is the time to take advantage of that mistake and buy Micron stock on sale, as it has major upside potential.

Keithen Drury has positions in Micron Technology. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool has a disclosure policy.