Micron CEO Says "There Is No AI Without Memory"as Customers Seek 50% More Supply

Micron (MU) CEO Sanjay Mehrotra said AI has changed the memory business. Data-center customers now want about 50% more supply than Micron can commit, showing how quickly demand is outpacing available supply.

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"Today there is no AI without memory," Mehrotra told CNBC's Jim Cramer. He said the value of memory has changed as AI systems become more demanding.

AI Demand Pushes Micron's Memory Supply Higher

The 50% supply gap gives investors a sense of the pressure Micron is facing from data-center customers. The company cannot currently commit to all the memory its customers want.

That tight supply could support memory prices and Micron's earnings. If demand stays ahead of supply, MU stock could have more room to rise.

Mehrotra also expects memory demand to grow beyond data centers. He pointed to autonomous vehicles and other AI-powered devices as areas that could drive demand. He called memory "the strategic infrastructure of the AI era."

Micron Commits $10B to Future Memory Research

Micron announced a planned $10 billion investment over the next decade in Micron Research Labs in Boise, Idaho. The facility will focus on memory technology, advanced compute architectures, packaging, and future semiconductor manufacturing.

The investment adds to Micron's more than $250 billion commitment to U.S. manufacturing and R&D. The company expects to break ground on the new research facility in 2027, with space for hundreds of researchers.

The plan also drew support from Nvidia (NVDA) CEO Jensen Huang and Apple (AAPL) CEO Tim Cook. Huang called memory reinvention "one of the great challenges of the AI era."

Is MU Stock a Buy Now?

BMO Capital initiated coverage of MU stock with an Outperform rating and a $1,300 price target. The firm said Micron is benefiting from a "prolonged memory supercycle" driven by tight supply and "exceptionally strong" demand. BMO also said Micron is seeing growth across all its major product lines.

Also, Bank of America analyst Vivek Arya has a Buy rating and a $1,550 price target on Micron. The 5-star analyst expects the company to generate more than $230 in EPS by fiscal 2030.

Meanwhile, Wall Street has a Strong Buy consensus on MU stock, based on 29 Buy ratings and one Hold. The average price target for Micron is $1,568.39, implying about 61% upside from Thursday's close of $974.33.