Micron gains as leading brokers raise targets on continued pricing strength

Investing.com -- Shares of Micron Technology rose more than 4% in premarket trading Monday after several Wall Street brokerages lifted their price targets, pointing to sustained strength in memory pricing and strong demand tied to AI workloads.

RBC Capital Markets analyst Srini Pajjuri increased his price target to $525 from $425 while maintaining an Outperform rating, saying estimates are being lifted on the back of stronger pricing trends.

“We are raising estimates significantly on continued pricing strength. The key question is about duration—our base case is for pricing to increase through CY26,” Pajjuri wrote.

He added that while the pricing of DDR, the standard DRAM memory used in PCs and servers, should eventually moderate, “tailwinds from HBM pricing and content should continue through CY27.”

Separately, TD Cowen analyst Krish Sankar also hiked his target to $500 from $450 and reiterated a Buy rating. He expects Micron to report earnings above consensus and forecast further growth in the coming quarters.

Sankar said he models $65 and $90 in earnings per share for calendar 2026 and 2027 respectively, while noting that pricing durability will be key for further upside.

“Our field work supports this – DRAM remains the tightest market over next 2 yrs (followed by HDDs, then NAND), suggesting similar LTA momentum in DRAM to HDDs is achievable,” Sankar wrote.

He added that the key upside driver from here could come from a "re-rating via durability of pricing/earnings," noting that the market currently applies what it views as a trough multiple to what it perceives as peak earnings.

Baird analyst Tristan Gerra also raised his target to $500 from $443 and kept an Outperform rating, pointing to rapidly rising DRAM pricing and constrained supply. The analyst expects the industry to remain tight as demand from AI-related computing continues to accelerate.

Gerra noted that DRAM prices are expected to more than double sequentially in the current quarter and rise further in the following quarter, while supply growth remains limited. With most new memory capacity going toward high-bandwidth memory used in AI chips, the outlook suggests a “very tight” supply environment through 2027.

Shares of Micron have surged nearly 50% so far this year and have more than quadrupled over the past 12 months as demand linked to AI has driven higher sales and memory prices. AI developers are seeking chips as quickly as manufacturers can produce them, creating shortages in memory components and pushing pricing higher across the market.

Micron is scheduled to report earnings for the second quarter of fiscal 2026 after the market closes on Wednesday.

The chipmaker said Monday it plans to build a second manufacturing facility in Taiwan at the Tongluo site it recently acquired from Powerchip Semiconductor Manufacturing Corp. The new facility will expand supply of advanced DRAM products, including high-bandwidth memory, to support rising demand from AI applications.

Micron also said it has completed the acquisition of PSMC’s Tongluo P5 site and that the new plant will be of similar scale to its existing fabrication facility in Miaoli County.

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