Micron's AI-Driven Rally Takes a Breather as Analysts Eye $1,000 and Beyond

Micron shares fell 9% from a record high on profit-taking, but strong AI-driven demand for HBM memory, sold out through 2026, supports analyst targets up to $1,140.

Micron Technology's share price pulled back nearly 9% on Tuesday, sliding to around €616 after touching a fresh all-time high of €676 the previous session. The retreat — a textbook profit-taking move following a rally that has more than doubled the stock since January — comes against a backdrop of unprecedented fundamental strength that has analysts reaching for price targets well above current levels.

The selloff does little to undermine the structural story. Micron's production of high-bandwidth memory (HBM) is sold out through the end of 2026, and the company is now testing new 256-gigabyte server modules designed specifically for AI workloads. These modules slash power consumption compared with older generations and arrive as data center operators scramble to secure supply. Chief Business Officer Sumit Sadana told analysts on the last earnings call that demand so far exceeds supply that even massive capital investments cannot close the gap quickly.

Wall Street is largely convinced. Deutsche Bank analyst Melissa Weathers lifted her price target to $1,000 after meetings with Micron management, arguing that artificial intelligence is fundamentally reshaping the traditionally cyclical memory-chip industry. "The value of memory has never been higher," she quoted from the management briefing. Bernstein's Mark Li reiterated his buy rating with a $510 target — a figure already eclipsed by the current share price — and described Micron as a structural leader justifying a re-rating. Investor Ross Gerber goes further, forecasting earnings per share of $57 for 2026 and a stock price of $1,140.

The bullish case is reinforced by geopolitical tensions in the memory supply chain. Samsung's unions are demanding 15% of operating profit as employee bonuses and have threatened a general strike on May 21 if negotiations fail. Micron, Samsung and SK Hynix together control more than 90% of global DRAM supply. Any disruption from Samsung would tighten a market already gripped by shortages. DRAM contract prices are expected to rise as much as 63% in the current quarter, and Gartner forecasts a full-year increase of 125%.

Micron's financial results justify the frenzy. In its fiscal second quarter, the company posted adjusted earnings per share of $12.20, beating consensus by nearly a third, on revenue of $23.9 billion — roughly 20% above estimates. Gross margin hit 74.4%, a level more typical of software companies than memory manufacturers. To feed the insatiable demand, Micron raised its capital expenditure budget for the current fiscal year to more than $25 billion, $1 billion higher than previously planned, with similar construction spending penciled in for 2027.

Yet even as the order book bulges, insiders are cashing out. Company executives, including CEO Sanjay Mehrotra, have sold millions of dollars' worth of shares in recent months, with Mehrotra unloading a large package in early May. Institutional investors still hold roughly 81% of the float, and funds like HighPoint Advisor Group have been adding aggressively. But with the relative strength index touching nearly 78 before Tuesday's drop, the stock was deeply overbought. The current pullback is unwinding that technical tension — and for believers in the AI memory supercycle, it may be little more than a brief pause before the next leg higher.