Key Highlights
- Needham elevated its Micron stock target to $450 from a prior $380, holding a Buy recommendation, driven by constrained memory supply and expanding artificial intelligence applications.
- Deutsche Bank pushed its projection to an even more aggressive $500, upgrading from $300, while maintaining its Buy stance based on DRAM supply limitations that may extend to 2028.
- Morgan Stanley confirmed its Buy rating with a $450 target on February 16.
- The company delivered first-quarter fiscal 2026 sales of $13.6 billion, representing a 57% year-over-year surge, accompanied by record-setting free cash flow of $3.9 billion and gross profit margins reaching 56.8%.
- UBS forecasts DRAM contract pricing to climb 62% while NAND prices advance 40% in Q1 2026, though experts caution the favorable memory cycle may eventually reverse.
Wall Street has grown increasingly enthusiastic about Micron Technology (MU), with several prominent investment firms boosting their price projections as memory chip supply tightens and artificial intelligence applications continue expanding.
Needham’s N. Quinn Bolton increased his valuation target for MU shares to $450 from $380 on February 17, maintaining his Buy recommendation. Bolton emphasized the ongoing supply constraints in the memory sector that continue pushing prices upward. He highlighted significant capital expenditures by cloud hyperscalers and the industry’s transition toward more sophisticated AI reasoning models requiring expanded context windows as critical catalysts for demand growth.
One day prior, Morgan Stanley’s Joseph Moore confirmed his Buy rating while keeping his price objective at $450.
Deutsche Bank took the most aggressive stance. The firm elevated its target from $300 all the way to $500 on February 10, preserving its Buy recommendation. Deutsche Bank emphasized increasingly tight DRAM supply dynamics and elevated memory pricing levels, projecting that industry-wide shortages could persist through 2027 and potentially into 2028.
These supply constraints are clearly reflected in Micron’s financial performance.
Exceptional Financial Performance
Micron delivered first-quarter fiscal 2026 revenue totaling $13.6 billion, representing a 21% sequential increase and a 57% year-over-year jump. This marked the company’s third consecutive quarter of record-breaking revenue.
Gross profit margin reached 56.8%, climbing 11 percentage points from the previous quarter. Free cash flow hit an all-time high of $3.9 billion.
Every product segment achieved record sales. Cloud Memory revenue reached $5.3 billion. Core Data Center contributed $2.4 billion. Mobile and Client segments generated $4.3 billion. Automotive and Embedded operations added $1.7 billion.
The company’s AI-focused memory solutions are completely sold out for 2026, and Manish Bhatia, Micron’s EVP of Operations, characterized the memory chip supply shortage as “unprecedented” in January.
UBS anticipates contract prices for a standard DRAM variant to surge 62% in Q1 2026 compared to the preceding quarter, with NAND pricing advancing approximately 40%. TrendForce estimates the overall memory market will achieve $551.6 billion in 2026, expanding to $842.7 billion by 2027.
Extended Supply Limitations Anticipated
Additional manufacturing capacity won’t materialize quickly. Micron has committed approximately $200 billion toward expanding its domestic facilities, but clean-room construction requires substantial time. Wafer production from its $50 billion Idaho expansion isn’t anticipated until mid-2027. A $100 billion New York facility is scheduled for 2030.
SK Hynix’s Yongin manufacturing cluster is projected to achieve volume production in late 2027, while Samsung is also increasing capital expenditures from an already elevated level.
Analysts widely anticipate supply constraints among the industry’s three dominant manufacturers — Micron, SK Hynix, and Samsung — to persist for at least 12 to 18 months.
Micron’s February-quarter financial results, scheduled for release next month, are projected to demonstrate revenue more than doubling year over year, with earnings anticipated to expand more than fivefold compared to the corresponding period last year.
