Micron Technology, Inc. (NASDAQ:MU) shares are getting a nice bump this morning, up more than 3% in premarket trading as the broader market leans into risk. Nasdaq futures are up 0.53%, and S&P 500 futures have gained 0.18%. But the real story isn't just today's move; it's the argument that this memory chip maker could have a lot more room to run.

Adam Parker, founder and CEO of Trivariate Research, made the case on CNBC last Friday that Micron's earnings and cash flow could stay stronger for longer than most people expect. He ran 10,000 simulations to figure out how long the current cycle might last and how much cash the company could generate. His conclusion? The market is too pessimistic about the downturn that usually follows a memory boom.

Parker Sees Micron's Earnings Staying Stronger for Longer

Parker thinks consensus estimates are too quick to assume earnings will fall off a cliff after hitting a peak. He estimates Micron is trading at roughly 11 to 12 times normalized earnings and about five times peak earnings. That's cheap, in his view.

He also believes investors aren't fully pricing in Micron's cash generation potential. He estimates the company could generate close to $300 billion in free cash flow over the next two years. That's a staggering number, and it's why he thinks the stock will "probably" double over the next couple of years before the cycle ends.

When asked if Micron could eventually hit a $1 trillion market cap, Parker said, "I wouldn't be shocked." That's a bold statement for a company that's currently valued at around $1.1 trillion, but Parker's point is that the market is underestimating just how much money Micron can make in this cycle.

Industry Changes Challenge the Old Memory-Cycle Playbook

Parker's argument isn't just about the current cycle; it's about how the memory industry has fundamentally changed. He points out that DRAM used to account for about 40% of a server's cost, but now it's less than 10%. That means memory is less of a cost burden for customers, which could make demand more resilient.

The industry has also consolidated, with fewer players controlling supply. Parker expects constrained supply to help sustain the cycle, allowing Micron to generate more earnings for longer than investors currently anticipate. In other words, the old boom-and-bust playbook might not apply the same way it used to.

Parker Plays Down China Supply Risk

One of the biggest fears for memory investors is that Chinese semiconductor companies will flood the market with cheap supply, crushing prices. Parker downplays that risk. He notes that building leading-edge manufacturing capacity takes years, and competitors can't just ramp up production overnight.

So, even if China is investing heavily in memory, it won't be able to disrupt supply conditions quickly. That means persistent supply constraints and stronger-than-expected earnings could support Micron's performance over the next few years.

Earnings And Analyst Outlook

Micron's next earnings report is estimated for Sept. 22. Analysts expect earnings of $31.27 per share, compared with $3.03 per share a year earlier. Revenue is projected at $50.81 billion, up from $11.31 billion. Those are eye-popping numbers, and they reflect just how strong this cycle has been.

The stock carries a Buy consensus rating with an average price forecast of $1,537.50. Recent analyst moves include Citigroup, which maintained a Buy rating on Aug. 7 but lowered its price forecast to $1,150. KeyBanc Capital Markets maintained an Overweight rating and raised its price forecast to $1,750 in July, while Cantor Fitzgerald maintained an Overweight rating and raised its forecast to $2,000 in June.

Top ETF Exposure

• Invesco PHLX Semiconductor ETF (NASDAQ:SOXQ): 8.91% Weight
• State Street SPDR NYSE Technology ETF (NYSE:XNTK): 8.14% Weight
• Invesco AI and Next Gen Software ETF (NYSE:IGPT): 8.71% Weight

Significance: Because MU carries such a heavy weight in these funds, any significant inflows or outflows for these ETFs will likely force automatic buying or selling of the stock.

Price Action

MU Stock Price Activity: Micron Technology shares were trading higher by 3.58% at $1006.47 during premarket trading on Monday, according to market data.