Micron Shares Surge to Unprecedented Highs on AI-Driven Optimism

Micron US5951121038

Fueled by a bullish analyst upgrade and robust financial projections, Micron Technology's stock achieved a historic peak on Friday, closing with a gain of approximately 7.5% to surpass $311. The shift in investor sentiment underscores a growing Wall Street consensus that the memory chip sector is undergoing a structural transformation, primarily driven by the infrastructure demands of artificial intelligence.

The company's recent quarterly report provides a solid foundation for the market's enthusiasm. For its first fiscal quarter of 2026 (corresponding to calendar Q4 2025), Micron reported revenue of $13.6 billion, representing a 56% year-over-year increase. Earnings per share soared by 175% to $4.60, while free cash flow exceeded $3 billion.

More critically, the guidance for the current quarter significantly outpaced prior analyst expectations, pointing to rapid expansion. The company forecasts:

• Revenue: Approximately $18.7 billion (±$400 million)
• Gross Margin: Around 67%
• Earnings Per Share: Between $8.22 and $8.62

Bernstein Sets Street-High Price Target

The immediate catalyst for the rally was an aggressive upgrade from investment bank Bernstein SocGen Group. Analyst Mark Li raised his price target substantially from $270 to $330, which now stands as the highest among all market observers covering the stock. He maintained an "Outperform" rating on the equity.

Li's rationale centers on accelerating pricing power for memory chips. Bernstein anticipates DRAM prices will climb between 20% and 25% quarter-over-quarter in the first half of 2026. This projection suggests the supply-demand imbalance is intensifying rather than easing.

Capacity Constraints and Dual Demand Drivers

A tangible supply crunch is supporting these pricing dynamics. Micron's entire production capacity of High Bandwidth Memory (HBM)—a critical component for AI accelerators like Nvidia's GPUs—is already sold out for the 2026 calendar year. This scarcity grants the company considerable leverage in negotiations.

Demand is being fueled from another major direction as well. Data centers are increasingly replacing traditional hard drives with flash-based SSDs to handle AI workloads. Hyperscalers, including Meta, Google, and OpenAI, are engaged in massive infrastructure builds that require vast quantities of high-performance memory.

Taiwanese Government Bolsters R&D Efforts

Amidst this market surge, Micron is securing further governmental support for its advanced research. The Taiwanese government has approved additional subsidies of T$4.7 billion (about $149 million) dedicated to HBM research and development. This brings the total value of the support package to T$10 billion (roughly $318 million).

This three-year initiative, running until October 2028, strengthens Micron's strategic position within a key global semiconductor hub and facilitates the expansion of advanced packaging technologies.

The memory cycle powered by AI appears to be in a phase of continued growth, not at its peak. After a remarkable 239% gain in 2025 that made it the second-best performer in the S&P 500, Micron's powerful start to the new year indicates the momentum is far from over.