TLDR
- Micron stock fell about 2% Thursday to $1,046.37 in premarket trading, even after a nearly 600% gain over the past year.
- UBS analyst Timothy Arcuri kept a Buy rating and raised his target to $1,625, citing a widening gap between memory supply and demand.
- Citi analyst Atif Malik also reiterated a Buy rating and lifted his target to $1,300 from $1,150 on stronger DRAM pricing.
- Micron’s buyback restrictions tied to its 2024 Chips Act funding are set to expire on Dec. 9.
- Micron reports fiscal fourth-quarter earnings on Sept. 30, with Wall Street watching for confirmation of pricing strength.
Micron Technology stock slipped about 2% Thursday, trading near $1,046 in premarket action. The pullback comes after a run that has seen the stock climb nearly 600% over the past 12 months.
Two major Wall Street analysts still see more room to climb. UBS analyst Timothy Arcuri and Citi analyst Atif Malik both reiterated Buy ratings this week, pointing to a memory market that keeps getting tighter.
Arcuri raised his eyebrows at the math on this one. He set a target price of $1,625, based on a forward price-to-earnings multiple of eight times his 2029 earnings forecast for the company.
Why Analysts See More Upside
The case rests on simple supply and demand. AI servers need huge amounts of memory, and chipmakers can’t keep up.
Arcuri wrote that his latest checks show a widening gap between what buyers want and what’s available. He expects Micron to report fiscal fourth-quarter revenue of $52.4 billion on Sept. 30, along with earnings per share of $32.50.
Citi’s Malik landed close to that number too. He forecasts $51 billion in fourth-quarter sales and EPS of $31.45, both a touch above the Street’s consensus.
Looking further out, Malik expects fiscal first-quarter 2027 sales to hit $57 billion, with EPS climbing to $35.25.
Pricing trends are backing up the optimism. Citi now expects blended DRAM prices to rise 20% sequentially in the fiscal fourth quarter, then another 13% the quarter after that.
Malik expects both DRAM and NAND to stay undersupplied for a while yet, though he sees price growth cooling over the next four quarters. He pegs the peak around the second quarter of 2027.
The Buyback Story
There’s another piece to this puzzle that doesn’t get as much attention. Micron currently can’t run big buybacks or pay special dividends because of terms attached to the Chips Act funding it took in 2024.
Those restrictions expire Dec. 9. Arcuri thinks Micron could kick off buybacks around $20 billion a quarter, scaling up toward $50 billion quarterly by the end of fiscal 2027.
That combination of pricing power and buybacks is what gives Arcuri confidence even in a downside scenario. He argued that even if open-market memory prices dropped 80% once the current AI-driven cycle winds down, which he pegs for the second half of 2028, Micron would still post higher annualized earnings than it does today.
Long-term pricing agreements and the eventual buyback program are doing the heavy lifting in that math.
Citi is also watching Micron’s spending plans closely. The firm expects Micron to put roughly $50 billion toward capital expenditures in fiscal 2027, with more than $20 billion of that going toward equipment.
Micron’s market value has already pushed past $1 trillion following its run this year. The next real test comes with the fiscal fourth-quarter earnings report, due Sept. 30, which will show whether pricing strength is actually showing up in the numbers Wall Street is expecting.
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