Micron Stock Looks Cheap Despite 220% Rally. Is More Upside Coming?

What happened

Micron plans six manufacturing facilities over the next two years: three are expected to be ready by mid-2027 and three in 2028. The company expects memory shortages to deepen in 2027 and 2028 as artificial intelligence data center demand outpaces added production. Its shares have risen about 220% this year.

Confirmed

Global impact / market context

If demand from artificial intelligence data centers remains ahead of available memory, Micron may be able to sell more output and support earnings growth. But facilities take time to open, so shortages could persist even as construction adds costs before new production is ready.

Analyst inference

Micron’s planned factory expansion may not quickly close the memory supply gap, because new facilities take time to produce while demand from AI data centers remains strong. If shortages persist, customers may compete for available memory, supporting Micron’s earnings; rising earnings or a higher valuation could also support its shares.

Analyst inference

What to watch

1. Track whether Micron delivers the three facilities expected by mid-2027 and the remaining three in 2028; delays could postpone added production while shortages are forecast to deepen. Analyst inference
2. Watch whether memory supply catches up with data center demand and whether Micron’s expectation of deeper shortages in 2027 and 2028 changes. Confirmed
3. Compare future earnings growth with the stock’s valuation: the article’s upside case depends on earnings rising or investors paying more for each unit of profit. Analyst inference

Evidence

• gurufocus.com