Micron's Fully Booked Order Book Meets a Wall Street That Can't Agree on the Price

Micron shares tumble 33% from highs despite record revenue; Citi cuts target, BofA sees buying opportunity amid AI-driven memory demand.

The memory chipmaker's stock closed Friday at €760.90 in German trading, roughly a third below its 52-week high of €1,103.80 reached on June 25. Yet over the past twelve months, the shares have still gained an extraordinary 692.60 percent. That contradiction — record demand against a cooling price curve — has split Wall Street into two camps with sharply different conclusions about what comes next.

Two Banks, Two Narratives

Citi trimmed its price target on Micron from $1,400 to $1,150 on Friday while maintaining a buy rating. The bank's reasoning centers on pricing momentum that is real but fading: it expects DRAM and NAND prices to peak in the second quarter of 2027, followed by four quarters of softening. Gross margins, currently in the high 80s, would drift down to the mid-70s by 2027. Roughly 40 percent of DRAM bits are covered by long-term supply agreements, which should cushion some of the pressure.

Bank of America's Vivek Arya sees the situation through a different lens. He reaffirmed his $1,550 price target on Tuesday, dismissing the recent sell-off as a "summer reset" — a buying opportunity rather than a fundamental warning. Arya points to rental prices for Nvidia GPUs such as the A100, H100, and H200, which remain near all-time highs, and server DRAM price forecasts for the third quarter of 2026 calling for a 13 to 18 percent sequential increase. Spot prices for both DRAM and NAND have been stable to rising in recent weeks. In a separate note, he argued the sell-off reflects investors positioning for a future downturn rather than any actual deterioration in fundamentals — even in a bear case, he estimates 2028 earnings per share of around $100, more than eight times the previous cycle peak from 2018.

The Numbers Fueling Both Arguments

The financial results give ammunition to both sides. In the third fiscal quarter ending in late May, Micron generated revenue of $41.46 billion — up 346 percent year over year — with adjusted earnings per share of $25.11, comfortably beating the consensus estimate of $20.20. Gross margin jumped from 37.7 percent to 84.6 percent. For the current fourth fiscal quarter, the company has guided to revenue of $50 billion, give or take $1 billion, supported by newly signed multi-year supply agreements with strategic customers.

The first three quarters of fiscal 2026 through May 28 tell an even broader story: revenue of $79 billion, up 203 percent year over year, with net income of $47 billion and a 60 percent margin. Sequential growth has been striking — third-quarter revenue of $41.46 billion compares with $23.86 billion in the prior quarter and just $9.30 billion in the year-ago period.

On the technology front, Micron teamed up with Microchip in early August to unveil a PCIe Gen 6 storage solution featuring its 9650 NVMe SSD, described as the first production-ready SSD of that generation for AI and data center applications.

Why the Order Book Looks So Different From the Stock Chart

The company's HBM memory capacity is fully sold out through 2027 — a fact that market observers view as a key stability factor for the coming quarters. Long-term contracts have secured $22 billion in prepayments from 16 partners, with $18 billion already received. In mid-July, Micron also signed strategic agreements with automotive suppliers including Qualcomm, Visteon, HARMAN, JOYNEXT, DENSO, Astemo, and Hyundai Mobis.

Analysts still project revenue growth of 247 percent for the current fiscal year 2026 and another 85 percent in fiscal 2027. The competitive picture, however, is getting more complicated. Chinese memory maker ChangXin Memory Technologies is building its own HBM capacity and could erode Micron's market share over time.

Insider Sales and the Road Ahead

CEO Sanjay Mehrotra has been a notable seller of company stock in recent weeks — 18 transactions in early July totaling $43.36 million, followed by two more transactions in late July worth roughly $37.3 million. Such sales are open to interpretation and offer no clear signal about future direction.

Morgan Stanley's Sean Kim, meanwhile, declared the steepest correction phase among Korean memory makers over, raising price targets for SK Hynix to 2.6 million won and Samsung Electronics to 375,000 won — each implying upside of more than 60 percent. The firm did not issue a new target for Micron itself; the optimism applies specifically to the Korean manufacturers.

The central question hanging over the entire memory sector remains unresolved: is this the start of a multi-year supercycle driven by AI infrastructure, or just an unusually pronounced phase of the industry's familiar boom-and-bust rhythm? The next quarterly results, expected September 22, should offer some answers — analysts currently anticipate earnings per share of $31.30.