TLDR
- Micron closed 1.2% lower at $1,063.96 on October 5, even as analysts stayed bullish.
- Susquehanna kept a “Positive” rating and $2,000 price target, implying nearly 88% upside.
- Morgan Stanley holds an “Overweight” rating with a $1,200 target, pointing to about 10% upside.
- Fiscal 2026 revenue hit a record $133.2 billion, up 256% year over year.
- Wall Street’s Strong Buy consensus carries an average price target of $1,581.40.
Micron Technology (MU) stock slipped 1.2% to close at $1,063.96 on October 5. The dip came even as two major brokerages doubled down on their bullish calls for the memory chip maker.
Susquehanna Financial Group reiterated its “Positive” rating and kept its price target at $2,000. That figure is nearly double Micron’s closing price and implies about 88% upside from here.
Morgan Stanley took a more measured view but stayed firmly bullish too. The firm kept its “Overweight” rating and a $1,200 price target, suggesting roughly 10% upside.
The optimism follows a blowout fiscal 2026. Revenue hit a record $133.2 billion, up 256% from the prior year.
Gross margin expanded to 81.1%, a 40-point jump. Earnings per share soared 811% to $75.52.
The fiscal fourth quarter alone brought in $54.2 billion in revenue, up 379% year over year. That marked the sixth straight quarterly record for the company.
Why Analysts See More Room to Run
Susquehanna expects Micron to earn $176.39 per share on $284.56 billion in revenue in fiscal 2027. That’s a steep jump from fiscal 2026’s $75.52 per share.
The firm points to strong memory chip demand paired with disciplined industry spending. Rising prices for high-bandwidth memory, or HBM, should also help.
Nvidia’s upcoming Rubin platform and wider use of custom AI chips are expected to push HBM demand even higher. As those prices climb, Micron’s margins could edge closer to the company average.
Susquehanna does expect gross margin to dip in the November quarter before climbing again. Beyond that bump, the firm sees the memory supply crunch lasting through 2028.
Morgan Stanley’s Joseph Moore made a similar point in his October 1 note. He wrote that the debate has shifted from how good things can get to how long they can stay good.
Moore noted that Micron’s earnings beats have gotten smaller lately. The company topped estimates by just 5% this time, down from 20% to 40% in prior quarters.
He doesn’t see that as a warning sign. He called it “the new normal as Micron’s visibility improves.”
Supply Stays Tight Through 2028
Micron CEO Sanjay Mehrotra didn’t hold back on the earnings call. He said the company has no clear line of sight on when memory supply and demand will balance out.
Customers are responding by locking in supply early. Micron has signed 26 strategic customer agreements worth a combined $32 billion in commitments.
More than 75% of Micron’s 2027 output is already spoken for, according to Mehrotra. Moore described the long-term deals as proof of customer anxiety over securing memory years in advance.
Building new capacity isn’t quick either. Cleanroom construction takes years, and Susquehanna flagged this as a key bottleneck heading into the next few years.
Industry-wide spending discipline is expected to help keep supply from spiking too fast. Micron’s broad base of customers and products should also soften any blow from a future downturn.
On the cash side, Micron plans to start returning all excess cash to shareholders beginning in early December. Susquehanna forecasts around $100 billion in average annual free cash flow for 2027 and 2028 combined.
If that cash goes toward buybacks, Susquehanna estimates Micron could repurchase about 16% of its outstanding shares.
Wall Street currently holds a Strong Buy consensus on the stock, with 25 Buy ratings and one Hold.
The average analyst price target sits at $1,581.40, implying nearly 49% upside from current levels.
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