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Micron Stock Is Up 140% and Analysts Predict Even More Big Gains. AI Is Why.

Oct 16, 2025 10:21:00 -0400 by Mackenzie Tatananni | #AI #Street Notes

Citi Research maintained a Buy rating on shares of Micron Technology while boosting the price target to $240 from $200. (Photograph by Tomohiro Ohsumi/Bloomberg)

Key Points

Shares of Micron Technology have surged 140% this year, but some analysts see no end in sight to the gains.

That’s because high demand for artificial intelligence and high-performance computing are creating a rapidly growing need for storage.

Citi Research analyst Christopher Danely argued that dynamic random-access memory, or DRAM, which the kind of storage used in most laptops and personal computers, “will be the next chip to get long-term contracts with the AI food chain given its importance and undersupply.”

Danely maintained a Buy rating on the shares and hiked his price target to $240 from $200 in a note Thursday.

Micron gained 6.3% to $204.08, putting the stock on pace for a record high, according to Dow Jones Market Data. The updated target suggests nearly 18% upside.

We’ve seen this story before, Danely said, pointing to Nvidia, Advanced Micro Devices , and Broadcom. All three companies evolved their technology to support a broader range of HPC tasks. Nvidia , for one, started with graphics processing units used in gaming before designing the chips that power AI.

“We believe the impetus for this is AI companies needing to secure supply for DRAM, given increased demand from the AI space,” Danely wrote. “We believe this will benefit Micron via higher and sustainable DRAM pricing.”

This expected surge in demand is driving higher estimates. The analyst expects Micron’s gross margins to expand to 60% in the fiscal third quarter of 2026 from 44.7% in the fiscal fourth quarter of 2025, near its previous peak of 60.8% in 2018.

The analyst models fiscal 2026 earnings estimates of $21.05 a share, up from $16.93 a share previously, and $62.5 billion in sales, up from $56 billion. These figures are markedly higher than consensus estimates. Analysts tracked by FactSet are forecasting earnings of $16.08 a share and sales of $54 billion.

So far, strong demand and limited supply have contributed to higher prices, which Benchmark analysts say is one indicator that Micron will post stronger-than-anticipated earnings and guidance later this year.

The firm noted earlier this week that Micron had notified customers of a 20% to 30% price increase for NAND memory and had “temporarily stopped accepting new orders.” NAND is a type of flash memory that doesn’t need power to retain data.

Micron is set to report fiscal first-quarter earnings in December.

Attitudes on Wall Street are generally optimistic. Of 42 firms polled by FactSet, 38 rate Micron at Buy or Overweight. Three rate the stock at hold, while one—Morningstar Equity Research—rates it at Sell.

Timothy Arcuri, an analyst with UBS, joined the chorus of support, maintaining a Buy rating and boosting his price target to $245 from $225. The higher target suggesting 20% upside.

In his note, Arcuri cited “a very robust demand environment being met by acute and worsening DRAM supply shortages.”

Besides hyperscalers, or the operators of large data centers, he wrote, “even more smartphone customers (are) now asking for more DRAM supply.”

While Arcuri is bullish on Micron’s prospects, he expects the company to be squeezed by near-term capacity constraints.

Micron’s Idaho factory is only expected to start ramping production in the first quarter of 2026, with the first wafers arriving in the second half of 2027, he said.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com