Micron Technology (MU +4.23%) has a big event coming up on June 24: its quarterly earnings release. Normally, quarterly earnings aren't that big of an event. Still, with how quickly Micron is growing (Micron's stock is up nearly 250% in 2026 so far) and how rapidly the artificial intelligence (AI) landscape is shifting, this could be a monumental event.
While investors have enjoyed great returns so far, I think Micron's stock still has more room to run and could be a smart buy before the company reports earnings on June 24, as a post-market jump may be looming based on what Micron says about demand. I've got three reasons, so let's consider each one.
Image source: Getty Images.
1. The memory chip crunch isn't subsiding
First, let's look at what made Micron one of the hottest stocks on the market. Micron makes both kinds of memory chips, DRAM and NAND. Each is in high demand, but for different reasons. DRAM memory gets deployed in AI computing units and is used as a rapid-access memory when a device like a GPU is performing a calculation. It's also the same type of memory in a PC or laptop. NAND memory is used in solid-state drives (SSDs), which are deployed in data centers for long-term data storage. These units are also facing a supply shortage.
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Key Data Points
When demand is high and supply is low, economic theory dictates that prices soar, and that's exactly what has happened over the past year. Micron has capitalized on the soaring prices of its products and delivered monster revenue and earnings growth over the past year. There's not a whole lot that has happened over the past few months for the supply situation to get better, so it's likely that Micron will still see soaring revenue growth in this quarter and project a strong quarter ahead.
2. Next year's data center spending will be even greater
One thing some investors are concerned about is how long Micron can keep its prices elevated. The simple answer is that it will be able to maintain its prices as long as demand is elevated. AI hyperscalers aren't slowing their spending anytime soon. In fact, investors have already received some news regarding 2027 spending.
Alphabet told investors that 2027's spending will be "significantly" higher over 2026, which will be between $180 billion and $190 billion. Nvidia told investors that AI hyperscaler spending will top $1 trillion next year, up from about $650 billion this year.
All this creates an environment where a memory chip shortage could persist for some time. Although Micron and its peers are working on increasing production capacity, that won't be online until later in 2027, and even then, this capacity could go toward meeting current demand, to say nothing of future demand.
3. Despite its rise, Micron's stock isn't overly expensive
You'd think after a stock has more than tripled this year, it may look overvalued, but that's not the case. Micron's stock trades for 16.4 times forward earnings -- for its fiscal 2026 ending in August 2026. When you use fiscal 2027 earnings, it looks even cheaper.
MU PE Ratio (Forward) data by YCharts
Micron's stock isn't overly expensive despite its rise, and if Wall Street analysts are correct about next year's growth patterns, the stock could easily double again over the next year. That makes Micron a strong stock to consider investing in before the company reports earnings on June 24, as a bullish outlook could send the stock through the roof.
