Wall Street raises Micron price targets, with one analyst going as high as $2,200

Micron Technology beat Wall Street's already-elevated expectations, prompting a string of price target upgrades from global investment banks that now forecast memory supply shortages lasting at least through 2028.

JPMorgan raised its price target on Micron from $550 to $1,540, according to financial investment industry sources Friday. D.A. Davidson went further, lifting its target from $1,500 to $2,000, saying Micron had become "a company with the best earnings visibility in the semiconductor industry — unlike anything seen before."

Citi raised its target to $1,400 and maintained a buy rating, saying Micron had "significantly improved business visibility and sustainability" by securing roughly 40 percent of its projected revenue over the next five years through strategic customer agreements, or SCAs.

Wall Street praised the structure of these take-or-pay contracts, which include annual volume commitments, upfront deposits, and price floors and ceilings. Analysts said the arrangements give Micron a stable earnings base that stands in sharp contrast to the memory industry's historically volatile, cycle-driven revenue swings.

In its fiscal third-quarter earnings call, Micron said the number of strategic customer agreements had grown to 16 and could eventually cover close to half of total revenue. The contracts typically run five years, with upfront cash deposits alone totaling $18 billion and financial commitments reaching $22 billion when broader financing arrangements are included.

The results themselves far exceeded market expectations. Micron posted fiscal third-quarter sales of $41.46 billion and adjusted earnings per share of $24.82, both well above consensus estimates. The company also guided for fourth-quarter sales of $50 billion, extending its earnings beat streak.

The most aggressive call came from Melius Research, which doubled its price target from $1,100 to $2,200, arguing that the memory industry is "increasingly shifting toward a recurring revenue model similar to software-as-a-service."

Melius analyst Ben Reitzes said Micron would soon secure half of its future revenue through five-year contracts with guaranteed price floors, adding that "all memory product categories will remain in a state of undersupply for the foreseeable future."

Micron projected that HBM demand in 2027 and 2028 would significantly outpace supply capacity. The company also pulled forward its forecast for the HBM market to surpass $100 billion — previously expected in 2028 — to 2027.

CEO Sanjay Mehrotra said on the conference call that it would "take considerable time" for memory and storage supply shortages to ease. He added that while industry supply was expected to gradually improve in 2028, it was difficult to gauge when supply would catch up with growing demand.

Wall Street broadly believes the memory sector has entered a phase that warrants a higher valuation than in the past. Bank of America said "evidence supporting a structural re-rating of the memory sector continues to build," forecasting that price-to-earnings multiples — historically in the 8-to-10 times range — could expand to 12 to 15 times.