Have you ever watched a stock triple in less than a year and still felt like the real move hadn’t even started yet?
That’s exactly where I find myself with Micron right now. The stock is already up more than 213% year-to-date, and yet one of the sharpest analysts on the Street just came out and said, essentially, “Yeah, but we’re still too low.”
Seriously – when a major bank lifts its price target from $275 to $295 just weeks before earnings, you sit up and pay attention.
The Supply Crunch Nobody Saw Coming (Or Did They?)
Let’s start with the core of the bullish thesis: memory chips – both DRAM and NAND – are in a state of what analysts politely call “meaningful undersupply.” Translation? There simply aren’t enough chips to go around, and that situation isn’t fixing itself anytime soon.
In fact, the latest checks suggest DRAM could stay tight all the way into early 2027, while NAND constraints might stretch into late 2026. That’s not a quarter or two of pricing power – that’s years.
And when supply is that constrained, something fascinating happens: customers stop waiting for the “right” moment to lock in contracts. They start signing deals earlier and earlier in the quarter, sometimes even paying above spot just to guarantee volume.
“We flag an even stronger pricing environment in both core DRAM and NAND than we had previously assumed.”
Lead analyst covering the memory space
Why This Cycle Feels Different
I’ve followed memory cycles for years, and they usually follow a pretty predictable script: prices spike, capacity comes online, prices crash, rinse, repeat. But this time the script got thrown out the window.
The AI boom changed everything. Training large language models and running inference at scale requires insane amounts of high-bandwidth memory (HBM) and fast DRAM. And guess who’s one of only three companies in the world that can produce cutting-edge HBM at volume? You got it.
Meanwhile, on the NAND side, the shift toward higher-density SSDs for enterprise and AI training datasets keeps demand red-hot. Smartphone recovery is just gravy at this point.
The Math That Makes Wall Street Drool
Here’s where it gets really interesting. The same team that just raised the target now sees Micron earning close to $38 per share in calendar 2027. Yes, you read that right – thirty-eight dollars.
To put that in perspective, the company is expected to earn roughly $4.27 in the quarter we’re about to see reported next week. That’s a near 9x increase in earnings power over three years, driven almost entirely by better pricing and mix shift toward HBM.
Even if you slap a conservative 20x multiple on those 2027 earnings (which feels low given growth rates), you’re looking at a $760 stock in 2027. The new $295 target suddenly starts looking… cautious.
What to Watch in Next Week’s Earnings
The Street is modeling roughly $13.2 billion in revenue and $4.27 EPS for the fiscal first quarter – numbers that already bake in massive pricing gains. But here are the three things I’ll be laser-focused on:
- How early in the quarter did customers start locking in contract prices?
- Any update on HBM3E ramp timeline and qualification status with the major hyperscalers?
- CapEx guidance – are they still throttling new capacity to keep the cycle going longer?
- Margin trajectory – gross margins should be pushing toward mid-40s if pricing holds
If management sounds even mildly confident about supply remaining constrained through 2026, this stock is going to gap higher Thursday morning. Bank on it.
The Risk Side (Because Balance Matters)
Look, nothing goes up forever. I get that. If China ramps domestic memory production faster than expected, or if the major cloud providers suddenly slam the brakes on AI spending (unlikely, but possible), this whole thesis falls apart.
There’s also the geopolitical angle – export restrictions, trade tensions, you know the drill. Memory is a global business, and disruptions hurt.
But right now? The supply-demand imbalance is so extreme that even significant new capacity would take 18-24 months to come online. By then, AI workloads could be double what they are today.
Where the Stock Could Go From Here
Short term, the path of least resistance feels higher. The new $295 target implies roughly 12% upside, but if the pricing environment is as strong as checks suggest, we could see other firms racing to catch up.
Some of the more aggressive bulls are already have targets north of $300. A few even whisper about $400 longer term if HBM margins prove as juicy as rumored.
In my experience, when the fundamental setup is this strong and the technicals are breaking out (MU just cleared its 2021 highs), you don’t fight it. You ride it.
Next week’s print will tell us whether this is just another leg in an already epic run – or the start of something even bigger.
Either way, memory stocks have rarely looked this compelling. And if you’ve been waiting for a pullback that never comes… well, maybe it’s time to stop waiting.
