On August 20, Micron Technology (NASDAQ:MU) said it will spend $10 billion over the next decade on a new research lab in Boise, Idaho, dedicated to advancing memory technology and compute systems. The announcement lands just weeks after the company posted its fifth straight quarterly revenue record, powered by soaring demand for the chips that feed AI. The lab is a bet that this boom has years left to run. The stock’s recent slide suggests plenty of investors aren’t so sure yet.
Bull Case: The Shortage Nobody Sees Ending
Micron’s fiscal third quarter, which ended May 28, brought in $41.5 billion in revenue, up 346% from $9.3 billion a year earlier, with data center sales alone contributing $25.3 billion, more than 60% of the total. Guidance for the fiscal fourth quarter calls for around $50 billion in revenue and gross margin near 86%, both records if they hold. That growth is being driven by high-bandwidth memory, the stacked DRAM chips that move data to AI accelerators fast enough to keep them fed, and JPMorgan estimates DRAM prices will have jumped 400% from the start of 2024 to the end of 2026.
Management has said it doesn’t see a clear end point for the shortage, with tight supply conditions expected to persist beyond calendar 2027. TrendForce projects the global DRAM market will grow from $618.7 billion this year to $903.3 billion in 2027, and Micron holds roughly a quarter of that market today. The Boise lab fits the same long-range thinking. It builds on the more than $250 billion Micron has now committed to U.S. manufacturing and research through 2035, and it’s designed to connect the company’s research footprint across the US, Europe, Japan, India, Singapore, and Taiwan into one hub able to host hundreds of researchers once it breaks ground in 2027.
Bear Case: The Boom Has Broken Before
None of this erases memory’s history. Over the past 10 years, Micron has at times seen its revenue drop by as much as 50% in a single year when the cycle turned. From fiscal 2017 through fiscal 2025, its earnings rose 72% in total, a reminder that the pace of the last few quarters is the exception rather than the rule. That history is part of why the stock trades where it does, even after it crossed $1.1 trillion in market cap. Trailing 12-month net income has reached $50.5 billion, but $42 billion of that arrived in just the two most recent quarters alone. Annualize those two quarters and Micron’s market cap sits at roughly 13 times that run rate, a multiple that only makes sense if the current pace is expected to cool.
