Micron (MU): Analyst Sees AI Tailwinds, Limited Upside

Micron Technology, Inc. (NASDAQ:MU) is one of the AI Stocks in the Spotlight This Week. On September 24, BofA Securities analyst Vivek Arya raised the price target on the stock to $180.00 (from $140.00) while maintaining a Neutral rating following the earnings print.

In a research note, the analysts told investors that Micron is benefiting from the “dual drivers” of surging artificial intelligence demand and tight supply discipline in the memory industry.

Traditional server CPU sales are also witnessing renewed demand driven by agentic AI, and so are solid state drives used in AI clusters. The firm has meaningfully increased estimates following the report, but reiterated a Neutral rating since much of the upside is already priced in the stock which is up 98% year-to-date.

“MU is benefiting from the dual-drivers of surging AI demand (driver of high bandwidth memory or HBM sales) and the memory industry’s (abnormal) supply discipline that has pushed up pricing in traditional (D4) and new (D5) markets. In addition, there is an underappreciated resurgence in traditional server CPU sales driven by agentic AI (positive for AMD) and in high-capacity solid state drives used in AI (inference) clusters. GM was guided to 51.5% in FQ1 (600bps above consensus) and to expand again into seasonally softer Q2, suggesting continued pricing strength. We meaningfully raise FY26/27E estimates, by 38%/56% to $16.28/$17.55. We raise our PO to $180 from $140 on higher 2.6x CY26E P/B (vs 2.2x prior) on stronger margins, though still within 0.8x-3.1x l-t range. Reiterate Neutral given: 1) FQ4 HBM sales were largely in line around $2bn, with MU attaining its HBM market share, 2) Samsung entry into HBM market could impact industry share (and pricing) in CY26, and 3) Much of the EPS revisions were expected by investors based on the +98% YTD stock run (vs. SOX +27%). Read-across wise, we see AI strength as positive for NVDA, AVGO; traditional server CPU strength positive for AMD; and potential for somewhat higher memory capex positive for AMAT and somewhat for LRCX.”

Micron Technology, Inc. (NASDAQ:MU) develops and sells memory and storage products for data centers, mobile devices, and various industries worldwide.

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