'Load Up Here,' Says Timothy Arcuri About Micron Stock After Investor Meetings

Micron (NASDAQ:MU) is undergoing a shift in the nature of its business that has been a clear positive for both the company and its investors. While the computer memory industry has long been known for its sharp cycles and boom-and-bust dynamics, today's AI-driven surge in demand is reshaping that pattern. The result has been something closer to a supercycle, with memory prices climbing as demand meaningfully outpaces available supply.Claim 70% Off TipRanks PremiumUnlock hedge fund-level data and powerful investing tools for smarter, sharper decisions Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential That changing dynamic was front and center during a series of recent investor meetings with Micron's management, after which UBS analyst Timothy Arcuri came away convinced the company's upward trajectory won't be curtailed any time soon. "The company struck a positive tone – particularly around the durability of the cycle… we still believe investors are underappreciating the degree to which AI has fundamentally made memory (DRAM in particular) a more strategic asset," noted Arcuri, who is ranked 6th among thousands of Wall Street stock experts. The company indicated that it is currently able to satisfy only ~50–75% of demand from its key customers, such as hyperscalers. Management also noted that adding sufficient capacity will take "a very long time," emphasizing that having available shell space alone is insufficient and that qualifying a leading-edge DRAM process in a greenfield facility is time-consuming. Taken together, these factors appear to underpin Micron's constructive view on the durability of the current memory upcycle. Management also emphasized that customers are fundamentally shifting their view of memory from a commodity asset to a strategic asset, which is driving a reassessment of how memory is procured. But more importantly, says the analyst, in the pre-AI environment, memory suppliers saw limited returns from offering meaningfully higher performance products, as memory was largely treated as a standard system component. In contrast, suppliers are now being rewarded for "best-in-class performance," as memory has become a critical differentiator within hardware platforms, such as Nvidia's Blackwell and Blackwell Ultra systems. Arcuri thinks investors appear to be underappreciating the growth in DRAM content within AI servers. The company highlighted the roughly ~3x increase in DDR content between Nvidia's Blackwell and Rubin architectures, rising from ~500GB to ~1.6TB, as an important dynamic that is currently being overlooked. In addition, while HBM content is unchanged across the Blackwell and Rubin platforms, the transition from HBM3E to HBM4 brings higher bandwidth, which effectively increases I/O density and results in larger die sizes. This shift is reflected in the trade ratio moving closer to 4:1 compared with 3:1 previously. That's not the only thing that's being underappreciated. So is the "EPS durability," partly because each successive generation of HBM becomes obsolete far more quickly than was historically the case for traditional DRAM. "Ultimately," Arcuri summed up, "this is now a dis-incentive for customers to build inventory, and these supply dynamics are what historically drove such severe cyclicality. We believe this may argue for a re-rating of the stock and new ranges for key metrics like P/TBV." Reflecting that view, the analyst raised his calendar 2026 EPS estimate from ~$41 to ~$45 and lifted his 2027 forecast from $42 to ~$60. The price target for the stock was also increased, climbing from $300 to $400, which implies around 16% upside from current levels. Unsurprisingly, Arcuri's rating on Micron shares stays a Buy. (To watch Arcuri's track record, click here) Overall, most analysts covering Micron remain bullish, with the stock sporting a Strong Buy consensus based on 25 Buys versus just 2 Holds. Yet, the Street's average price target of $329.73 actually implies a modest 3% downside over the next 12 months. That disconnect suggests either more target hikes are on the way – or some analysts may eventually blink and rein in their ratings. (See MU stock forecast)