Micron's $52 Million Insider Sell-Down Puts a Damper on Bank of America's $950 Bet

Micron hits $900B market cap amid AI boom; BofA raises target to $950 on supply constraints, but insiders sold $52M in shares. Structural scarcity through 2028.

The memory-chip maker that has ridden the AI wave to a record market capitalization above $900 billion is sending mixed signals. While Bank of America has more than doubled its price target on Micron to $950, confident that supply constraints will persist for years, company insiders have been quietly cashing out — offloading about $52.4 million worth of shares over the past three months.

Director Steven Gomo alone sold 2,000 shares on May 13, 2026, pocketing roughly $1.57 million. That transaction was one of 63 insider trades during the period, with sellers consistently dominating. For a stock that has surged more than 152% year-to-date and closed above $800 for the first time on Wednesday — settling at $803.63, up 4.83% — such insider activity raises an eyebrow.

Bank of America Bets on Structural Scarcity

Analyst Vivek Arya at Bank of America argues that Micron is no longer a simple cyclical memory play. The bank now sees the addressable market for AI data-center systems hitting $1.7 trillion by 2030, more than double its previous estimate of $823 billion from last summer. The thesis hinges on a persistent imbalance: AI accelerators demand ever more high-bandwidth memory (HBM) and advanced DRAM, but new capacity is coming online slowly.

The bank forecasts that the DRAM and NAND supply-to-demand ratio will stay below 110% through 2028 — historically a sweet spot for pricing power. New fabrication plants won't ease the crunch anytime soon. Micron's Idaho fab won't deliver its first wafers until mid-2027, and its advanced-packaging facility in Singapore will contribute only in early 2027. Meaningful relief, according to Bank of America, is unlikely before 2028.

The HBM market alone could expand from roughly $35 billion in the middle of the decade to $168 billion by 2030, the bank projects. That structural growth underpins a two-part valuation: roughly $240 per share for the AI and HBM business, and about $710 for the traditional DRAM and NAND segment.

Record Numbers, Sky-High Expectations

Micron's recent results support the bullish narrative. The company posted quarterly revenue of $23.9 billion, up 196% from a year earlier, with adjusted earnings per share of $12.20. Management guided for a record $33.5 billion in sales next quarter and a gross margin near 81%.

CEO Sanjay Mehrotra has noted that some key customers are receiving only half to two-thirds of their requirements, an indication of how tight supply has become. That leverage explains why the market is awarding Micron multiples that would have seemed unthinkable for a memory manufacturer just a few years ago.

The product pipeline adds to the momentum. On May 12, Micron announced samples of new 256GB DDR5 RDIMM modules capable of 9,200 megatransfers per second, while cutting power consumption by more than 40% compared to configurations using multiple 128GB units. The modules target servers handling large AI models — a segment where energy has become a bottleneck.

The Valuation Balancing Act

Yet the rally has stretched the numbers to the breaking point. Micron's trailing price-to-earnings ratio stands at 37.94, well above its five-year median of 20.72. GuruFocus estimates fair value at $336.93 per share, meaning the stock currently trades about 138% above that level.

The analyst consensus remains firmly positive — 27 buys and three holds out of 30 ratings — but the average price target of $608.33 is now 24% below the U.S. closing price. That gap underscores how far the stock has run ahead of traditional modeling.

Hyperscaler spending provides a powerful tailwind. Amazon and Microsoft are each budgeting close to $200 billion for AI-related investments, with Alphabet just behind and Meta raising its own forecast, explicitly citing higher memory prices. Total AI spending could surpass $1 trillion by 2027, according to Bank of America.

Micron is concurrently investing heavily in new capacity: a $100 billion mega-fab under construction in New York since early 2026 and plans for a $24 billion wafer facility in Singapore over the next decade. The question is whether those investments will ultimately close the supply gap faster than expected — and whether today's valuation leaves any room for error. For now, the insider sell-off serves as a quiet counterpoint to the AI euphoria.