Micron Technology (MU) stock closed 1.2% lower at $1,063.96 on October 5, but Susquehanna Financial Group remains bullish on the memory-chip maker. The brokerage reiterated its "Positive" rating and $2,000 price target, which is nearly double Micron's latest closing price and implies about 88% upside. Susquehanna sees strong memory-chip demand and disciplined industry spending supporting Micron's earnings growth.

The firm expects Micron to earn $176.39 per share on $284.56 billion in revenue in fiscal 2027. That compares with its forecast of $75.52 in earnings per share and $133.19 billion in revenue for fiscal 2026.

Why Does Susquehanna See Nearly 88% Upside for Micron Stock?

Susquehanna sees strong memory-chip demand and disciplined industry spending driving a sharp increase in Micron's earnings. At the same time, the growth of AI infrastructure should support higher prices for high-bandwidth memory (HBM).

The ramp-up of Nvidia's (NVDA) Rubin platform and greater use of custom AI accelerators should further boost HBM demand, according to the firm. As HBM prices rise, Micron could also see its margins move closer to the company-wide average.

Still, Susquehanna expects Micron's gross margin to decline in the November quarter before returning to sequential growth later. Beyond that near-term pressure, the brokerage expects the memory supply-demand balance to stay tight through 2028.

Demand has strengthened since the company's previous earnings report, prompting Micron to speed up its longer-term capacity expansion. Cleanroom construction will be especially important, as existing production upgrades may not be enough to meet future demand.

Meanwhile, industry-wide spending discipline should help prevent a sharp increase in memory supply. Micron's broad customer and product base could also lower the risk of a major demand drop during a downturn.

Micron Could Return More Cash to Shareholders

Susquehanna expects Micron to begin returning all excess cash to shareholders in early December. The brokerage also forecasts about $100 billion in average annual free cash flow in 2027 and 2028.

If Micron uses that excess cash for share buybacks, Susquehanna estimates the company could repurchase about 16% of its outstanding shares. That could give shareholders another source of returns as Micron's earnings grow.

Is MU Stock a Buy, Sell, or Hold?

With 25 Buys and one Hold rating, Wall Street has a Strong Buy consensus rating on Micron Technology stock. At $1,581.40, the average price target on MU stock implies 48.63% upside from current levels.