Micron (MU) has always been prone to cyclical booms and busts, making it a high-risk, yet popular stock among traders. The company’s volatile nature has been on full display over the past month, as breakneck sales and profit growth driven by AI demand have led to its shares surging 45%.
Investors like me (I bought shares on November 26) may still see more gains to come, given that the boom behind Micron’s meteoric rise may only be just beginning, and supply from new fabs will take time to ramp up.
Memory demand has soared as hyperscalers like Amazon, Google Cloud, and Microsoft’s Azure have plowed hundreds of billions into upgrading existing data centers and building new ones to handle the heavy workloads associated with artificial intelligence.
The spending frenzy includes an estimated $394 billion spent by hyperscalers in 2025, according to Goldman Sachs, with another $527 billion of spending on the horizon in 2026.
Meeting that demand for memory won’t be easy. Micron is sold out of its high-bandwidth memory, specifically suited to AI, and it has already shuttered its consumer memory business to reallocate resources to meet AI demand.
“Our customers’ AI data center buildout plans have driven a sharp increase in demand forecast for memory and storage. We believe that the aggregate industry supply will remain substantially short of the demand for the foreseeable future,” said Micron CEO SanjayMehrotra on the company’s fiscal first quarter earnings call in December.
The reality is that Micron is facing a supply bottleneck, and as a result, it’s embracing its own spending spree. It plans to spend $20 billion this year, including the first payments on a massive new $100 billion memory fab in New York, which is set to break ground soon.
Micron is investing in new semiconductor fabs to meet the surging demand for memory used in artificial intelligence.Shutterstock
President Donald Trump has made it a mission to increase U.S. manufacturing, including within the semiconductor industry.
Since 1990, the U.S. share of semiconductor production capacity has dwindled below 10% from 37%, according to the Semiconductor Industry Association. The CHIPS Act, passed during President Biden’s administration, helped provide money to break ground on U.S. semiconductor fabs. President Trump has picked up that mantle, encouraging more chip makers to bolster his “Made in America” pledge.
Currently, three companies — Micron, Samsung, and SK Hynix — account for 90% of the world’s dynamic random-access memory, or DRAM, chips. Micron is the only major memory maker headquartered in America. As of 2023, approximately 2% of global DRAM was manufactured in the United States.
“With Micron’s investments through CHIPS support in Boise, Idaho, as well as in Syracuse, New York, that 2% over the course of nearly 20 years will be changing to about 15% of the worldwide production coming from the U.S.,” said Mehrotra in a CNBC interview.
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The White House’s focus on the chip industry was on full display last year when President Trump took aim at Intel, initially lambasting CEOLip-Bu Tan before orchestrating a deal for the U.S. government to acquire a 10% stake in the embattled chip giant.
Micron will break ground on its mega fab in Onondaga County, New York, this year, but it made its decision to build the facility in 2022.
The move, alongside investments in Idaho, which will begin contributing to the memory supply in 2027, reflects an ongoing desire to reestablish the U.S. as a semiconductor-making powerhouse, reducing reliance on Asia, particularly Taiwan, which poses supply chain risks due to China’s interest in reclaiming it.
Clocking in at 2.4 million square feet, Micron’s new facilities in New York are a key component of Micron’s goal to produce 40% of its DRAM in the U.S. by the 2040s. Once done, the four fabs in New York will represent the largest clean room in the country.
The project, which breaks ground on January 16, won’t come cheap. It will cost $100 billion and take 20 years to finish. It’s expected to create 50,000 jobs, including “9,000 new high-paying Micron jobs with an average annual salary of over $100,000,” according to New York Governor Kathy Hochul.
Spending on the fab will also mean a payday looming for semiconductor equipment companies, namely Applied Materials and Lam Research, which produce the machines necessary to create next-generation memory chips.
Overall, Micron plans $200 billion worth of fab projects in the U.S., including “two leading-edge high-volume fabs in Idaho, up to four leading-edge high-volume fabs in New York, the expansion and modernization of its existing manufacturing fab in Virginia, advanced HBM packaging capabilities, and R&D to drive American innovation and technology leadership.”
The projects were supported by $6.4 billion in CHIPS Act direct funding, with an additional $5.5 billion from the state of New York available in GREEN CHIPS incentives over the project’s lifespan.
Micron’s New York fabs are expected to generate:
$9.5 billion in regional economic output annually starting in 2027, ramping up to over $16 billion annually by 2041
An additional $3.3 billion in annual disposable income for Central New Yorkers by 2035, averaging to $5.4 billion annually in 30 years
Nearly $20 billion in revenue for state and local governments to improve schools and other public services Source: New York State
My take: Micron has more demand than it can supply, and while it’s pulling levers to boost production, the Idaho fabs won’t add capacity until next year, and New York’s facility won’t add meaningful capacity until 2030.
Production will climb in 2026, but it’s likely we’ll still see a supply bottleneck that will support memory prices. According to TrendForce, DRAM contract prices will climb over 50% quarter over quarter in Q1 2026, supporting Micron’s revenue, profit, and likely its stock price.
Wall Street‘s consensus estimate is for earnings of $32.42 per share in fiscal 2026, up from $8.29 in fiscal 2025. In fiscal 2027, analysts are projecting EPS of $40.12. Growth like that is hard to ignore.
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