Will Micron stock hit $500 amid the ongoing memory shortage?

Micron stock price remains in a bull market this year as demand for the company’s products continues rising. MU jumped to $411 last week, a few points below the all-time high of $455.85. It has jumped by over 550% from its lowest level in April last year, making it one of the best-performing companies in Wall Street.

Micron stock has soared amid the ongoing memory shortage

The MU stock price has held steady in the past few months as investors react to the ongoing memory shortage that is spreading in the technology industry.

This shortage has also led to a surge in other top companies in the industry, like Kioxia, SK Hynix, Samsung, Western Digital, and Seagate Technology.

Some of the top companies that rely on these memory products have continued warning about their growth and product delays. For example, Tesla and other companies controlled by Elon Musk have hinted that they will have to build their own memory fabrication plants.

Apple has also warned of lower production and potential price increases of its products. Sony has also hinted that it may delay its PlayStation console to either 2028 or 2029. Other companies warning about the memory chip shortage are Lenovo and HP.

The ongoing memory shortage is happening as demand from large data center companies like Microsoft, Amazon, Google, and Meta Platforms continues rising, a trend that may accelerate after their recent spending. These companies have pledged to spend over $650 billion in the artificial intelligence industry.

The most recent results showed that Micron’s business continued growing in the first quarter of FY’26. Its revenue jumped by 57% YoY to over $13.6 billion. This rally was a 21% increase from what it made in the previous quarter.

Most of this growth was driven by the DRAM business, which made over $10.8 billion in revenue, up by 69% YoY. Its smaller NAND business also recorded a modest 22% growth rate to over $2.7 billion.

Most importantly, analysts believe that this growth will accelerate this year. The average estimate among analysts is that Micron's revenue for the last quarter will be $18.8 billion, up by 444% YoY. The annual revenue is expected to come in at $75.95 billion, up by 306% YoY.

This growth will likely continue because the ongoing memory shortage issue will not end soon, even as the company builds a multi-billion-dollar plant in New York.

At the same time, Micron is trading at a bargain price. Data shows that the company has a forward price-to-earnings ratio of 12.20, much lower than the sector median of 23 and the five-year average of 74.

The valuation multiple is also lower than other companies in the industry. For example, Western Digital has a forward PE ratio of 31, while Seagate has a multiple of 32.

Micron share price technical analysis

The weekly chart shows that Micron share price has rebounded in the past few months, reaching a high of $455 from last April’s low of $62.

It has remained above the 50-week and 100-week Exponential Moving Averages (EMA), a sign that bulls remain in control.

The stock has constantly remained above the Supertrend and the Ichimoku cloud indicators, while the Relative Strength Index (RSI) and the MACD have continued soaring.

Therefore, the most likely Micron stock price forecast is bullish, with the next key target being at $455. A move above that level will point to more gains, potentially to the psychological level at $500.

READ MORE: Micron stock price forecast: any more room for upside?