Remember when memory chips were the boring, cyclical part of the semiconductor world that nobody wanted to touch?
Yeah, me neither — at least not anymore.
Micron Technology has turned that old narrative completely on its head in 2025. The stock is already up a jaw-dropping 193% year-to-date, and yet one major Wall Street firm just came out and said: “We’re not done yet.” In fact, they think there’s another 13% upside coming in the near term. That kind of confidence after a triple-digit move deserves a closer look.
Deutsche Bank Just Raised the Bar — Way Up
This week, Deutsche Bank analyst Melissa Weathers reiterated her Buy rating on Micron and boosted her price target from $200 all the way to $280. That’s not a typo. We’re talking about a 40% increase in the target in a single note.
More importantly, the new target implies Micron shares still have meaningful room to run even from current levels around $247–$250. In a market where most mega-runs eventually exhaust themselves, that’s a bold statement.
So what changed in just a few months to justify that kind of optimism?
The Memory Market Looks Nothing Like Last Quarter
Weathers’ core thesis is simple but powerful: the memory environment has shifted dramatically — and for the better — since Micron last reported.
“All told, we believe MU is well poised to benefit from the upcoming memory cycle, with HBM driving structural changes in the industry that could warrant a higher valuation profile.”
Translation? This isn’t your grandfather’s memory cycle. The explosion in AI training and inference workloads has created a structural increase in demand for high-bandwidth memory (HBM), and Micron is one of the few companies in the world that can actually supply it in volume.
And unlike past cycles where oversupply crushed pricing power almost as fast as demand appeared, this time the supply side remains extremely tight. That combination — surging structural demand + constrained supply — is the holy grail for pricing.
DRAM Pricing Is About to Surprise Everyone (Again)
One of the biggest drivers behind the upgraded forecast is a much stronger outlook for dynamic random-access memory (DRAM) pricing through 2026.
Weathers now expects DRAM prices to rise in the high-20% range year-over-year next year — with meaningful upside risk to that number if supply remains disciplined.
Think about that for a second. In past memory upcycles we’ve seen pricing spikes of 50% or more. If we’re already starting from “high 20%” as the base case, the potential for positive surprises is enormous.
- Most of Micron’s DRAM business is contract-based with ~1-quarter duration
- New higher prices only flow through as existing contracts expire
- That means multiple quarters of sequential price/GB increases ahead
- Revenue and margin tailwinds will build gradually — then accelerate
In my experience, this “lagged pricing” dynamic is one of the most underappreciated aspects of memory stocks. The market often fixates on spot prices (which move instantly) and misses the much larger contract book that rolls over more slowly but far more predictably.
HBM: The Gift That Keeps Giving
If DRAM is the steady workhorse, high-bandwidth memory is the rocket fuel.
Micron has already sold out its 2025 HBM capacity and is in the process of selling out 2026 as well. Every major hyperscaler and AI GPU maker needs more HBM — yesterday — and there are only three credible suppliers globally: SK Hynix, Samsung, and Micron.
Perhaps the most interesting part? Micron appears to be the only one prioritizing profitability over market share right now. While competitors chase volume at almost any cost, Micron is holding the line on pricing. That discipline should translate directly to superior margins.
“We see MU as being particularly attractive among the memory names given its unique ability to prioritize profitability over market share in this environment.”
What to Expect From the December 17 Earnings Report
Micron reports fiscal Q1 results on December 17, and the setup looks extremely favorable.
Deutsche Bank is modeling:
- Revenue of $12.8 billion — toward the high end of guidance and in line with consensus
- Sequential revenue growth of 13% quarter-over-quarter
- Current quarter (Q2) guidance around $14.3 billion (+12% QoQ)
But here’s where it gets really interesting: the March quarter guidance could easily beat expectations if DRAM pricing momentum continues to build. Investors will be listening closely for any commentary on 2026 HBM allocation and contract pricing trends.
Putting It All Together — Why $280 Might Still Be Conservative
Let’s be honest — valuing memory stocks during the early stages of a major upcycle is notoriously difficult. Multiples can expand rapidly as the market prices in a multi-year earnings ramp.
If Micron simply grows earnings at the pace Wall Street expects over the next two years, the current forward P/E of ~9x starts to look laughably cheap. Add in the structural HBM tailwind and improving return on invested capital, and it’s not hard to imagine the stock trading at a meaningful premium to historical averages.
Personally, I wouldn’t be shocked to see certain analysts rolling out $300+ targets sometime in 2026 if execution remains clean and AI capex budgets keep growing.
The bottom line? Micron isn’t just riding a cyclical wave — it’s at the center of a structural shift in how the world processes data. And cycles built on structural demand tend to last longer and go farther than anyone expects at the beginning.
After a 193% move, it’s natural to wonder if the easy money has been made.
Deutsche Bank’s answer is a resounding no.
And honestly? After digging into the details, I’m inclined to agree.
Disclosure: No position in Micron at the time of writing, but watching closely ahead of earnings.
