MUZ

Anyone following the stock market will know that Micron (NASDAQ:MU) has been one of the standout performers this year, with shares up roughly 275% in 2026. Despite that huge gain, the stock is still around 16% below the all-time high it reached in late June. With Micron due to report its latest earnings on Sept. 30, the upcoming results could be an important moment for the stock.

The company has beaten expectations by wide margins in its recent earnings reports, and investor Keithen Drury, who ranks among the top 2% of investors on TipRanks, expects that trend to continue. In the investor's view, another strong quarter could give Micron the catalyst it needs to reclaim its previous high and potentially move into new territory.

Micron produces DRAM and NAND memory chips, both of which have become critical to the expansion of AI infrastructure. The surge in AI spending has created a huge increase in demand for memory, while chipmakers have struggled to add production capacity quickly enough. That supply-demand imbalance has pushed memory prices higher, creating a highly favorable environment for Micron.

The obvious concern is that memory chips are essentially commodities, meaning the industry has historically been highly cyclical. When supply catches up with demand, prices can fall sharply. Drury believes, however, that the current AI investment cycle could last long enough to make that less of an immediate concern.

Nvidia has forecast that annual AI spending could eventually reach $3 trillion to $4 trillion by 2030. It also expects the five largest AI hyperscalers to spend around $1.3 trillion in 2027 alone. If that level of spending materializes, the industry will need vast quantities of memory chips for years to come.

Micron expects the current supply constraints to continue beyond 2027, partly because its new manufacturing facilities are not scheduled to begin production until 2027 and 2028. Once that capacity comes online, supply should improve and could put pressure on memory prices. Drury argues that this does not necessarily mean Micron's profits would collapse, given the scale of AI-related demand expected over the same period.

Meanwhile, Micron's valuation is "dirt cheap." The stock currently trades at only about 6.6 times forward earnings, compared with roughly 24 times trailing earnings. That gap reflects the market's concern that the company's current earnings surge is temporary.

Drury believes a strong earnings report and outlook could challenge that assumption. If Micron can demonstrate that AI-driven demand has much further to run, investors might begin placing greater value on its future earnings potential.

"That could drive more buyers to the stock, leading to a soaring stock price," the 5-star investor summed up. "I think that revelation could be coming in just a few days, which makes Micron an excellent stock to buy before its earnings on Sept. 30." (To watch Drury's track record, click here)

It's clear the Street is thinking along the same lines. Based on a mix of 28 Buys and 1 Hold, the analyst consensus rates the stock a Strong Buy. The forecast calls for 12-month returns of 47.5%, given the average target clocks in at $1,557.12. (See Micron stock forecast)