AI And Data Center Demand Will Drive Advanced Memory Expansion

Micron Technology's analyst price target has climbed significantly from approximately $160 to $187 per share. Analysts cite strong quarterly results, higher profit margins, and optimism around sustained pricing power in the memory market as drivers of the increase.

Analyst Commentary

Following Micron Technology's strong quarterly performance, analysts have offered a range of perspectives on the company's outlook, valuation, and risks. Most commentary highlights optimism around operational execution, structural tailwinds, and further price target increases. Several notes also mention ongoing market uncertainties.

• Bullish analysts are raising price targets for Micron, with several now estimating levels at or above $200 per share. This reflects higher confidence in revenue and margin growth through 2026.
• Recent quarterly results have consistently beaten guidance, supported by robust artificial intelligence-related demand, strong DRAM and NAND pricing trends, and supply tightness across the memory market.
• Improving gross margins, a favorable product mix, and cost controls have set up expectations for sustained profitability well above historical averages.
• Micron's advancements in high bandwidth memory (HBM) and increasing data center demand are viewed as structural growth drivers. These trends position the company to gain further market share and deliver outsized earnings potential.

• Bearish analysts warn that much of Micron’s recent upside may already be reflected in its stock price following a roughly 98% year-to-date rally. This raises concerns about limited near-term multiple expansion.
• There is caution around volatility caused by potential industry shifts, such as changes to trade policy or hardware supply chain guidelines, which could impact US-based chipmakers and their customers.
• Some warn that continued strength in high bandwidth memory pricing may be at risk if oversupply develops in the future. Cyclical pressures remain a core concern for the broader memory market.

What's in the News

• The U.S. government is urging Taiwan to shift more chip production stateside, aiming for half of all chips consumed in America to be manufactured domestically. This is part of efforts to reduce dependency and counter geopolitical risks (Bloomberg).
• The Trump administration plans to require semiconductor makers to match domestic production with imported volume and intends to impose tariffs on companies failing to comply with this ratio (Wall Street Journal).
• Japan will provide approximately $3.6 billion in support for Micron to accelerate advanced DRAM manufacturing at its Hiroshima facility. The goal is to begin mass production by August 2028 (Nikkei Asia).
• China has launched anti-discrimination and anti-dumping investigations into U.S. chip trade policies, focusing on whether Chinese firms are being unfairly treated and on suspected dumping of U.S. analog chips (Reuters).
• Micron Technology has released new high-performance data center SSDs, including the world's first PCIe Gen6 NVMe SSD, positioning itself at the forefront of AI-driven storage solutions.

Valuation Changes

• Consensus Analyst Price Target has increased notably, rising from approximately $160 to $187 per share.
• Discount Rate has risen slightly, moving from 10.32% to 10.40%.
• Revenue Growth expectations have decreased modestly, shifting from 17.15% to 15.29% annually.
• Net Profit Margin is projected to climb meaningfully, increasing from 25.18% to 31.21%.
• Future P/E ratio has declined from 18.03x to 16.26x, which reflects an improved earnings outlook.