Wolfe Research Raises Micron Price Target to $550
Wolfe Research analyst Chris Caso raised the price target on Micron Technology (NASDAQ: MU) to $550.00 (from $500.00) while maintaining an Outperform rating.
“MU posted an extraordinary report and guidance. MayQ revenue guidance was $9bn ahead of the street (38%), with GM guidance of 81% (vs.
57% in Nov-25), now higher than NVDA GMs.
MU expects to generate $14 in FCF next quarter – when annualized, it drives a 10% FCF yield at the current stock price.
Our CY27 EPS now moves to $108 (vs. $61 consensus), ahead of our prior $80-90 bull case, driven by higher GM assumptions. The stock is now at 4x our CY27 EPS.
MU also noted that their HBM4 began volume shipments in CQ1 in support of NVDA Rubin, disproving press reports to the contrary (as MU noted at our Feb conference). Times are clearly good.
What we think is important now is not necessarily the magnitude of near term results, but rather sustainability, which comes down to two elements: sustainability of AI demand, and the sustainability of supply constraints.
Regarding AI demand, NVDA’s GTC helped drive confidence, and we found NVDA’s disclosures to be supportive of significant growth through CY27.
At least one MU customer (perhaps NVDA) signed a 5-year strategic customer agreement (SCA), which have more specific commitments over a longer duration than prior LTAs.
While there is some question about the extent to which the SCAs would protect margins and cash flow in the event of a slowdown, it nonetheless demonstrates confidence on the behalf of customers.
But we think the biggest argument for sustainability is the lack of physical cleanroom space required to support AI demand.
Our analysis from last week [link] indicated that the industry needs 6 new 100K DRAM fabs by the end of CY27 just to support NVDA and Google TPU demand.
But there isn’t enough infrastructure to support that, and it can’t be built quickly.
MU has about a fab and a half coming (Idaho and Tongluo) by FY28, and we don’t think that or competitors’ capacity will be enough to fully satisfy demand.
As such, we don’t see an end to supply shortages through CY27, which keeps us bullish despite this historic run.”
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