Wall Street analysts liked Micron’s big gains, and several companies raised their price targets following the report. The memory and storage solutions company on Wednesday reported fiscal second-quarter earnings per share of $12.20, with revenue nearly tripling to $23.86 billion. Both of these results significantly exceeded consensus estimates. The outlook for the current quarter also exceeded the expectations of analysts surveyed by LSEG. A surge in demand for memory due to the build-out of artificial intelligence continues to support Micron’s business, particularly from Nvidia, which uses the company’s products in its graphics processing units. Revenue from Micron’s cloud memory business increased 160% year over year. Micron CEO Sanjay Mehrotra said on an earnings call that capital spending is expected to increase “significantly,” adding that construction costs are expected to increase by more than $10 billion. Micron’s stock fell more than 6% in premarket trading Thursday, but analysts said they believed the reaction was related to higher-than-expected capital spending. Bernstein’s Mark Lee estimated that the company’s total capital spending for fiscal 2027 could be in the $30 billion range. “Concerns about higher capex and peaking gross margins in FY27 (81% > NVIDIA’s 75%) likely triggered some profit-taking after the strong stock price print,” Citi’s Atif Malik wrote, referring to the stock’s recent performance. Micron is the 8th best performing stock in the S&P 500 index in 2026. Analysts say stocks are also weighing on concerns that high memory prices won’t last forever and that the cycle is nearing its end. However, Morgan Stanley’s Joseph Moore noted that the increase in artificial intelligence is so large that it may differ from past memory price cycles, adding that the industry-wide memory shortage is likely to continue for some time. “There’s no sign that this train is going to slow down in the near term,” said Tom O’Malley, an analyst at Barclays. Analysts also noted that the company’s first strategic customer agreement with a private customer was for five years, an extended timeline compared to the typical one-year long-term agreements. While some analysts wanted more details about the deal, its length signals a shift for Micron’s customer base and the growing importance of memory. “This quarter also demonstrated a shift in the way MU’s customers treat memory as a strategic asset rather than a commodity input,” said Harlan Sarr, an analyst at JPMorgan. Bank of America: Buy, $500 The bank’s price target has been raised from $400, representing an 8.2% upside from Wednesday’s closing price. “Memory prices are likely to rise for an extended period of time (albeit stable) with 1) memory being a key driver of tokenomics, 2) new 5-year supply agreements (SCAs) that are cross-cycle in nature in addition to traditional 1-year LTAs, 3) limited cleanroom space across the board until CY27-28E… but cautions that spot prices are generally starting to stabilize (DRAM spot flat MTD and W/W), and MU GM could also be close to management’s FQ3 guide of 81.0% peak level.” UBS: Buy, $510 The Swiss bank’s price target has been raised from $475, suggesting an upside of more than 10% from Wednesday’s close. “A key takeaway from this discussion is that guaranteed memory supply is increasingly being positioned as a multi-year strategic priority rather than a Q/Q dynamic. This confirms our long-standing view that memory has become a key performance differentiator within AI hardware platforms.” Citi: Buy, $510 The bank’s price target has been raised from $430, indicating an upside of more than 10% from Wednesday’s closing price. “The big investor argument for this stock is that Windows PCs from the 1990s We think DRAM prices will continue to rise on the back of strong AI demand and limited new fab outperformance, as they did during the DRAM cycle, or will rise moderately in the second quarter following the DRAM price spike in the first quarter.We think the stock can sustain its rise, but we expect capital to rotate into semi-cap N/T due to increased capital spending.” Bernstein: Outperform, $510. “With only one strategic customer agreement (SCA) signed so far and few details to share, some investors are probably concerned about the risk of oversupply, but Micron is certainly inducing supply tightness beyond 2026 and is “far from meeting demand…for the time being…” Morgan Stanley: Overweight, $520 The bank’s price target indicates an increase from $450. Up 12.6% from Wednesday’s close “Not only is this likely to last as long as AI spending is at its peak, but based on industry conversations at this point, we believe memory is one of the biggest drivers of AI spending potential.”For three years, we heard others make that argument, and we disagreed with it because there was clearly room in the DRAM supply, but that room is running out. “AI is consuming so much DRAM that other sectors aren’t getting enough headroom, and everywhere you look there are signs that it’s a real bottleneck.” JPMorgan: Overweight, $550 The bank’s price target has been raised from $350, suggesting an upside of more than 19% from Wednesday’s close. “In our view, the revenue growth story from here is not driven by further gross margin expansion, but by the magnitude of future revenue growth that will still take years to add supply.” Remote and AI-driven demand continues to expand across training, inference, and edge workloads. Operating leverage is also an important and (we think) underappreciated driver of earnings. Despite revenue nearly tripling over the same period, operating income has increased modestly from approximately $1 billion in Q2 2025 to approximately $1.4 billion in Q2 2026, and the May-quarter outlook suggests that sales That’s up about 40%, while operating profit was roughly flat quarter-on-quarter at about $1.4 billion, suggesting operating margins should continue to expand even if gross margins plateau near where they are now. Wells Fargo: Overweight, $550 The bank’s price target is up from $470, representing more than 19% upside from Wednesday’s closing price. “Our long-standing thesis for MU is underpinned by our belief that the role of memory (DRAM + NAND/eSSD) will continue to expand and deepen (DRAM + NAND/eSSD) in driving the continued evolution of building AI infrastructure.” This is further reinforced by MU’s SCA activities. Our $550 increase in PT (from $470) reflects our belief that MU should trade at around 13-14x P/E with +$40/sh on-cycle/on-cycle EPS. ” Deutsche Bank: Buy, $550 The bank’s price target has been raised from $500, implying an upside of more than 19% from Wednesday’s closing price. “Given past amnesia cycles, we believe this cyclical caution from investors is prudent, and we acknowledge it.” Bearish claims are difficult to disprove in the short term (when and where will margins bottom?). Nevertheless, with demand for DRAM (both HBM and non-HBM) and NAND bits expected to grow significantly above historical levels, we believe concerns about such a cyclical peak have not yet matured, and we see a path to more resilient margins in the coming years.” Barclays: Overweight, $675 The bank’s price target is up from $450, 46% from Wednesday’s close. This shows that it is increasing. Supply and demand outlook for both DRAM and NAND until CY26. Highlights of the call included the announcement of the company’s first five-year SCA (versus the typical one-year LTA), providing additional stability and visibility, as well as a significant increase in FCF as management expects third-quarter cash flow to double in the third quarter (modeled at $5.5 billion in the second quarter and $13.7 billion in the third quarter) despite capital expenditures of approximately $7 billion in the quarter. ” Goldman Sachs: Neutral rating, $400 price target The bank’s price target has been raised from $360, suggesting a decline of more than 13% from Wednesday’s closing price. “The DRAM and NAND markets remain very healthy, and this will continue to be a tailwind for Micron’s business.” Additionally, the company’s product execution continues to improve, and Micron’s HBM market share is now in line with the company’s overall share position. However, given the expected significant addition of supply in 2027, we see a potential risk of slowing HBM price momentum in 2027, and remain neutral at this time. ”
