The Micron (MU) stock price bubble could best be explained — partially — by two simple numbers.
The quick analysis: Micron has become a major driver of the S&P 500’s (^GSPC) projected future earnings growth because of its strong outlook, Goldman Sachs strategists pointed out. It’s only second to AI chipmaker Nvidia (NVDA) in importance to the index.
Micron stands to represent 14% of the estimated 2026 EPS growth for the S&P 500 this year, based on Goldman’s analysis. That would be second to Nvidia’s 18%.
In 2027, Micron will make up 7% of the S&P 500’s expected EPS growth, with Nvidia at 19%.
Alphabet (GOOG, GOOGL) is a distant third.
Memory chip backdrop at a glance: The AI capital expenditures boom sweeping the US has funneled down to Sandisk (SNDK), Micron, and many others in the memory chip space. As hyperscalers such as Amazon (AMZN) build AI data centers, demand for memory chips has surged. These chips store and move data for AI models, which require large volumes of information to perform at high levels.
Memory has become one of the tightest parts of the AI supply chain, allowing the companies to hike prices to boost their profits.
The market used this backdrop to send the company beyond the $1 trillion market cap milestone for the first time on May 26.
And it did so in style.
The stock exploded 19.3% in a single session to close at an all-time high of $906.36, fueled by an upgrade from UBS despite the stock’s already epic run. Shares popped another 5% in premarket trading on Wednesday.
Micron is now sitting on a jaw-dropping 184% year-to-date gain for 2026.
Bottom line: Full stop, you are witnessing a stock bubble in Micron and, for that matter, most of the plays in the memory stock complex.
What ultimately pops the bubble is unknown until it happens. But rest assured, it will happen, and it won’t be pretty.
“We are cautious on certain parts of the market that have absolutely run away, whether it’s memory chips, whether it’s semiconductors,” Great Hill Capital chair Thomas Hayes said on Yahoo Finance’s Opening Bid. “And you’ll notice that they’ve gone parabolic in the last four to eight weeks as inflation expectations have risen as a result of elevated oil prices as a result of the Iran war. If we do get some resolution here in the coming days or weeks, I think you’re going to see a violent rotation out of these stocks and back into the everything trade that we began the year with before the Iran war.”
Brian Sozzi is Yahoo Finance’s Executive Editor and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.