Micron has just extended its AI development forecasts to 2031. Its action is destined to defy history.
Micronic technology (NASDAQ: MU) just released some explosive news about the world of AI: Its customers expect their massive memory needs to persist until at least 2031. That date was previously 2030, but as AI development continues to accelerate, Micron’s customers are extending their deals with it to lock in their access to memory chips for longer periods.
But that wasn’t the only bombshell Micron dropped on investors in its September 30 earnings report. It contained plenty of other information that makes the stock a screaming buy.
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How long can the memory industry boom cycle last?
Micron makes memory chips, which are very commoditized products. Within each generation of technology, there isn’t much difference between those created by one chip designer and another. This means technology companies can move from one vendor to another without running into technical hurdles, or source their memory from multiple vendors to get what they need. However, something unexpected happened to the memory chip industry in 2026: the supply ran out.
Largely due to the breakneck pace of AI data center construction, demand for memory chips is now far greater than supply, so memory chip prices have skyrocketed. Input costs for manufacturers have not changed much; Memory chip makers were free to raise their prices due to the laws of supply and demand, and they did so. This had a huge impact on the finances of Micron and its peers, and it was reflected in Micron’s results for the fourth quarter of its 2027 fiscal year (which ended September 3).
Revenue was $54.2 billion in the quarter, up from $41.5 billion in the previous quarter and $11.3 billion a year earlier. This is incredible growth, and with Micron forecasting $61.5 billion in revenue next quarter, more growth is to come.
Micron stock has soared nearly 500% over the past year as its profits have increased. However, in another sense, investors remain relatively cautious about the stock. Its forward price/earnings ratio is still around 6.
The reason for this caution is that the memory chip market has always been very cyclical. After each previous boom, a combination of slowing demand and increasing production capacity shifted conditions from scarcity to glut. Prices collapsed, taking Micron’s margins with them.
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