Micron Technology, Inc.’s stock is trading higher after Morgan Stanley reiterated its overweight rating and boosted the price target from $350 to $450. The shares went up 44% year-to-date and 327% over the past 12 months, driven by explosive demand for AI-driven memory chips. Sanjay Mehrotra, the CEO of Micron Technologies, reported a record revenue of $13.6 billion in its fiscal Q1, with data center revenue doubling, and confirmed that HBM4 supply for 2026 is already sold out, signaling sustained tight supply conditions.
The well-documented memory chip shortage has made Micron a central beneficiary of the AI hardware boom. The rapid expansion of AI hardware, such as data centers, GPUs, and accelerators, is consuming most of the memory chip supply and bandwidth, driving a sharp increase in demand for Micron’s offerings. While this is an unprecedented surge, analysts are arguing that Micron’s valuation remains compelling because earnings are rising even faster than the stock price. Followed by a recent pullback from an all-time high of $455 a share, the surge in Micron’s stock looks poised to continue.
Strategic Capacity Expansion
Micron Technology’s HBM (high-bandwidth memory), server-class DRAM (dynamic random-access memory), DDR5 (double data rate), and the broader DRAM portfolio are surging with explosive demand. Notably, AI chips from Nvidia, AMD, and Alphabet require enormous amounts of HBM, thus positioning Micron as the most supply-constrained memory type in the world. DRAM alone generated $10.8 billion, accounting for 79% of total sales, while NAND contributed $2.7 billion or ~19%.
DDR5 is the fifth generation of advanced synchronous DRAM and is in short supply, making it a major growth driver for Micron. As the latest memory standard, DDR5 powers modern servers, PCs, and AI systems. Reflecting this exceptionally favorable supply and demand dynamic, Micron’s FY25 sales hit a record $37.38 billion. Wall Street is expecting Micron’s EPS to spike 300% in FY26 to a record $33.22, a staggering acceleration that can reflect both pricing power and volume growth. Additionally, Micron is also preparing to announce an investment in memory chip manufacturing capacity in New York and Singapore, which is focused on DRAM and NAND flash production. This move reflects the company’s long-term expectation to remain strong, according to several media reports.
Strong Buy Consensus and Earnings Outlook
With the incremental greenfield capacity not meaningfully contributing until 2027 and beyond, near-term supply remains constrained while AI infrastructure spending continues to expand. As a result, rather than a short-lived memory rebound, investors are increasingly valuing Micron based on sustained pricing power and AI-related mix improvement.
Despite the growing competition from Samsung Electronics, Wall Street maintains a ‘strong Buy’ consensus. Analysts project $33.17 in earnings per share for fiscal 2026, implying a further upside, signaling that the majority of the analysts believe the AI-driven momentum is far from over. With the supply constraints expected to persist through 2028 and the AI infrastructure spending potentially reaching $4 trillion annually by 2030, Micron’s momentum appears to be poised to continue.
