TLDR
- Micron stock rose 3.5% to $982.05 in premarket trading on Thursday after falling from a late June high above $1,200
- BofA analyst Vivek Arya reiterated a Buy rating, citing the market is underestimating Micron’s transition to an AI-driven business
- Arya set a $1,550 price target based on a split valuation of Micron’s traditional and high-bandwidth memory businesses
- Big Tech is forecast to spend $1.5 trillion on cloud and AI infrastructure in 2027, up 40-50% from current levels
- Wall Street holds a Strong Buy consensus on MU with an average price target of $1,563.93, implying 64.8% upside
Micron Technology stock rose 3.5% to $982.05 in premarket trading on Thursday, July 9, after bargain hunters stepped in following a pullback from late June highs above $1,200.
The drop had rattled some investors who questioned whether big tech spending on AI would hold up. Turns out, others saw it as an entry point.
The mood got a lift from South Korea, where Micron peer SK Hynix jumped more than 5% in local trading Wednesday — a signal that appetite for memory chips hasn’t gone cold.
Bank of America analyst Vivek Arya, a 5-star rated analyst, wasted no time reiterating his Buy rating in a note to clients this week. He put a $1,550 price target on the stock.
“We believe the market is underestimating the transition toward longer-duration agreements and more predictable pricing,” Arya wrote. “As memory evolves from a cyclical commodity to a strategic AI enabler, multiples should expand.”
That’s a fairly clean thesis: memory used to be a boom-bust business. AI is making it something steadier.
BofA’s $1.5 Trillion AI Spending Forecast
Arya’s bullish case rests heavily on where he sees big tech spending going. He forecasts global cloud and AI infrastructure spend to hit around $1.5 trillion in 2027 — a 40% to 50% jump from current levels.
Memory components, he estimates, will account for 35% to 40% of that total. That’s a large slice of a very large pie.
The $1,550 target was built using a sum-of-the-parts model. Arya valued Micron’s traditional cyclical memory business at roughly three times expected book value for 2028. The high-bandwidth memory (HBM) segment, which feeds directly into AI systems, was valued at 31 times forecast 2028 earnings.
Wall Street Broadly Bullish on MU
Arya isn’t alone in his view. Wall Street’s consensus on Micron is a Strong Buy, based on 29 Buy ratings and just one Hold over the past three months.
The average price target across analysts sits at $1,563.93 — implying around 64.8% upside from current levels.
Micron stock has risen close to 700% over the past 12 months, though the recent dip from above $1,200 has trimmed those gains near-term.
With premarket trading showing renewed buying interest and peer SK Hynix posting a strong session in Seoul, Thursday’s early move suggests the selloff may have run its course — at least for now.
The average Wall Street price target of $1,563.93 remains well above current trading levels.
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