
Micron Price Target Raised at RBC on Stronger Memory Cycle, AI Demand
Micron Technology (MU) shares deserve a higher valuation amid a stronger memory cycle driven by AI demand and tight industry supply, RBC Capital Markets said in a note, raising its price target and earnings estimates for the semiconductor maker.AI-driven spending by hyperscalers points to capital expenditures remaining elevated through 2027, supporting strong memory demand and continued supply shortages across end markets, RBC analyst Srini Pajjuri wrote in the note emailed Monday.The shift toward inferencing and agentic AI is also creating a long-term tailwind for memory content, the analyst said.The current dynamic random access memory upcycle is in its 12th quarter, with a clear path to another five to six quarters, the brokerage said. DRAM contract prices are on track to rise 50% quarter over quarter in the June quarter, it added. The firm also raised its second-half pricing assumptions to double-digit sequential growth, up from mid- to high-single-digit estimates previously.DRAM is a type of semiconductor memory used to temporarily store data in computers, servers and other electronic devices.The brokerage raised its price target for Micron to $1,200 from $525 and maintained an outperform rating. For full-year 2026, RBC raised its earnings per share estimate to $60.88 from $57.10, while its fiscal 2027 estimate was lifted to $112.29 from $80.85. Analysts polled by FactSet expect fiscal 2026 EPS of $60.84 and $111.40 for fiscal 2027."AgenticAI is a secular tailwind for memory/storage content as multi-step autonomous workflows require dramatically larger context compared to traditional GenAI workloads based on single-prompt return," Pajjuri said. "As such, we believe a higher peak multiple is warranted."In addition, the growing contribution of high-bandwidth memory products is expected to support stronger margins and justify a higher valuation multiple, RBC said. The brokerage estimates HBM currently accounts for 10% to 15% of Micron's DRAM revenue and expects that share to increase in 2027 as HBM4 production ramps up and annual pricing resets take effect.



