Micron Technology: Analysts Revise Targets Upward Amid AI-Driven Supply Crunch

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Wall Street is undergoing a significant reassessment of Micron Technology's prospects. Fueled by the artificial intelligence revolution and a severe market imbalance, financial institutions are competing to issue increasingly bullish forecasts. With production for critical memory chips already sold out, projections point toward a substantial earnings surge by fiscal 2026.

The core driver of this positive sentiment is a fundamental supply-demand dislocation. Demand from AI data centers is creating a persistent shortage, particularly for advanced components like High-Bandwidth Memory (HBM). Micron has indicated that its HBM production capacity is fully allocated through the entirety of calendar year 2026. This environment grants the memory chipmaker significant pricing power and exceptional revenue visibility.

Analysts highlight three converging factors supporting the upgraded outlook:
* Pricing Stability: Firming prices for both DRAM and NAND memory chips are improving profitability.
* Structural Shortage: The supply crunch provides unprecedented forward revenue certainty.
* AI Infrastructure Expansion: Micron’s role as a key supplier of HBM positions it as a critical beneficiary of continued AI investment.

A rapid supply-side response is not anticipated. While new manufacturing facilities are in development, they are not expected to alleviate the shortage in the near term. According to analysis from KeyBanc, new "greenfield" production capacity is unlikely to come online before mid-2027 at the earliest.

Major Banks Raise Price Targets

In response to this shifting landscape, several prominent investment banks have dramatically lifted their price objectives for Micron shares. KeyBanc raised its target on Tuesday from $325 to $450, reiterating its Overweight rating. Bank of America also turned more optimistic, increasing its target from $300 to $400 alongside a Buy recommendation. UBS joined the chorus, similarly adjusting its price target to $400.

Based on the recent closing price of $338.13, these revisions imply considerable upside potential. The consensus among market experts is that the stock could see significant appreciation without entering overvalued territory, especially when viewed against future earnings projections.

Projected Earnings Explosion Reshapes Valuation

The current market dynamics are having a direct and powerful impact on financial forecasts. After Micron reported a 57 percent year-over-year revenue increase for the first quarter of fiscal 2026, market observers are now anticipating an explosion in profitability. The consensus estimate predicts earnings per share (EPS) will skyrocket from $8.29 in fiscal 2025 to approximately $32.30 in fiscal 2026.

This projected leap is fundamentally altering the investment thesis. Although the stock may appear expensive based on historical earnings, the forward-looking estimates present a different picture. Some strategists suggest that, given the expected 2026 profits, a doubling of the share price could be justified without the valuation becoming excessive.

The combination of sold-out capacity, increasing pricing leverage, and competitor production that is years away supports a sustained long-term upward trend. In this context, the minor seven-day decline of 0.42 percent appears merely as a consolidation within a broader growth cycle.