Why analysts think there is more to come in Micron’s rally?

Micron Technology’s stock continues its rapid ascent, hitting fresh all-time highs this week as Wall Street analysts raise their expectations ahead of the company’s fiscal first-quarter earnings report on December 17. The memory chip maker has become one of the standout beneficiaries of surging demand for artificial intelligence hardware, driving its shares to more than triple in value since the start of the year.Micron closed just under $264 on Wednesday, rising more than 4% during the session and cementing its status as the top-performing stock in the Nasdaq 100 in 2025. Analysts attribute the rally to a sharp increase in pricing across the memory market and expectations that Micron is well-positioned to capitalize as AI-related investment accelerates worldwide.Analysts cite AI momentum and tight supplyCiti analysts this week raised their price target on Micron to $300 from $275, doubling their target from early September. They noted that AI companies are buying memory chips as quickly as they can be produced, creating shortages and what they described as “unprecedented increases” in pricing. These conditions, they said, may drive “large capital infusions” into memory manufacturing, benefiting Micron as well as rivals focused on high-performance DRAM and NAND.Micron, a key supplier to Nvidia and Advanced Micro Devices, sits at the heart of this supply chain expansion. Analysts at Deutsche Bank echoed the bullish tone, lifting their target to $280 from $200 and calling Micron “well poised to benefit” from evolving memory-market dynamics. They also highlighted the company’s ability to prioritize profitability over market share, describing the stock as “particularly attractive” in the current environment.Last month, Morgan Stanley increased its target to $325 from $220 and upgraded Micron to a “top pick,” citing a dramatic increase in pricing for memory components that could boost sales and profits well into next year.HSBC sees ‘room for further growth’The bullish sentiment broadened this week as HSBC initiated coverage of Micron with a Buy rating and a $330 price target. Analyst Ricky Seo said concerns about financial pressures from new competitors and large-scale industry projects, such as the Stargate initiative, are overstated. He argued that despite Micron’s substantial outperformance this year, there is still “plenty of room for further growth.”HSBC expects Micron to significantly increase its share of the enterprise SSD market, projecting a rise from 15% in the second quarter of 2025 to 25–30% by fiscal 2027. The bank also forecasts operating profit growth at a 125% annual rate from 2025 to 2027, with estimates substantially above Wall Street consensus.UBS highlights tight supply through 2027UBS added to the chorus of optimistic forecasts on Wednesday, reiterating its Buy rating and raising its 12-month price target to $295 from $275. Analyst Timothy Arcuri pointed to “meaningful undersupply” across both DRAM and NAND markets, a trend he expects to persist through at least late 2026 for NAND and early 2027 for DRAM.Arcuri wrote that stronger-than-expected pricing should continue to push earnings estimates higher, forecasting roughly $38 in earnings per share for calendar 2027. He maintained his first-quarter projections of $13.2 billion in revenue and $4.27 in EPS, noting these remain ahead of the company’s guidance.While Micron’s momentum remains strong, some analysts are cautious, with the stock trading well above the average price target of roughly $237 among 11 tracked analysts. Still, the broad consensus leans bullish: LSEG data shows 40 of 46 analysts rate Micron shares a Buy or Strong Buy as the company heads into next week’s earnings release.The post Why analysts think there is more to come in Micron's rally? appeared first on Invezz