TLDR
- Nvidia CFO Colette Kress confirmed memory prices have exceeded prior expectations and are heading even higher into next year
- Nvidia has made $279 billion in supplier commitments, more than double the $119 billion from the previous quarter
- DRAM prices could climb over 50% this quarter, with NAND flash potentially jumping 60%, per Susquehanna research
- Wall Street’s average Micron price target sits near $1,525, with KeyBanc holding the highest target at $1,750
- Micron posted record Q3 sales of $41.46 billion and guided for approximately $50 billion next quarter
Micron Technology (MU) closed Wednesday at $938.40 and jumped another 3.09% in overnight trading Thursday to around $967.35, after Nvidia’s earnings call put memory pricing firmly back in the spotlight.
Nvidia CFO Colette Kress said during the company’s earnings call that memory price increases had “exceeded prior expectations” and were headed even higher into next year. Nvidia reported revenue of $96.2 billion for the quarter, doubling year-over-year, though gross margins came under pressure from rising memory costs.
Nvidia CEO Jensen Huang did not signal any plans to reduce memory spending. Instead, he said the company was working with all three major suppliers, Micron, Samsung, and SK Hynix, to increase capacity.
Nvidia’s total commitments to suppliers now stand at $279 billion, up from $119 billion the previous quarter. Memory accounts for well over half of that supply allocation, according to William Blair analyst Sebastien Naji.
“Memory scarcity today is being driven in large part by the AI buildout itself,” Kress said on the call.
Susquehanna research published Monday showed DRAM prices could rise more than 50% this quarter. NAND flash prices could jump as much as 60%. Gartner projects semiconductor revenue worldwide will hit roughly $1.6 trillion in 2026, with the memory segment alone approaching $837.3 billion.
Wall Street Raises Price Targets
BMO Capital started coverage on August 21 with an Outperform rating and a $1,300 price target. KeyBanc holds an Overweight rating with a $1,750 target. The consensus mean across Wall Street now sits near $1,476, roughly 60% above current levels.
Not every analyst is on board. TipRanks five-star investor Louis Gerard downgraded MU to Hold, pointing to a GAAP price-to-earnings ratio of 21.99x, compared to SK Hynix at 7.33x and Samsung at 12.14x. Gerard argued the earnings jump was driven more by price than volume.
Stifel analyst Ruben Roy noted that Nvidia did not pass the memory price increase through in full across its entire portfolio, absorbing a portion of the cost itself. That limits some concerns about pushback from Nvidia or its customers.
Micron Shakes Up Leadership
Micron also announced executive changes Wednesday. Manish Bhatia takes on the role of president and chief operating officer, overseeing manufacturing, customer demand, and pricing. Scott DeBoer becomes president and chief technology and products officer, leading the memory and storage technology roadmap. Sumit Sadana moves into a senior adviser role.
CEO Sanjay Mehrotra framed the current memory market as structural, backed by $22 billion in customer deposits across 16 strategic supply agreements.
“It’s no longer a commodity. It is a high value,” Mehrotra said.
Micron posted record Q3 sales of $41.46 billion and guided for approximately $50 billion this quarter, with adjusted gross margin near 86%. Its HBM4 chips are already shipping in high volume, with HBM4E development underway for 2027. The next earnings report is due September 30, with EPS expected at $31.26 versus $3.03 a year earlier.
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