BofA Securities Raises Micron Price Target to $500

BofA Securities analyst Vivek Arya raised the price target on Micron Technology (NASDAQ: MU) to $500.00 (from $400.00) while maintaining a Buy rating.

“Reiterate Buy and raise PO to $500 (vs. $400) following MU’s view of a durable memory cycle that lasts into CY27E at the earliest.

Particularly, memory pricing could remain elevated for longer (albeit stabilize) given: 1) memory is a critical driver of tokenomics, 2) new 5-year supply contract (SCA) that is cross-cycle by nature, on top of traditional 1- year LTAs, and 3) overall limited cleanroom space through ~CY27-28E.

As a result, we raise our FY26/27/28E EPS by 70-100%, with CY26/27 EPS of $69.88/$76.50.

However, we flag spot prices have generally begun to stabilize (DRAM spot flattish MTD and W/W), and MU GMs may also be near peak levels at mgmt’s FQ3 guide of 81.0%.

Declining GMs has typically been a concern in memory cycles and could create near-term volatility.

As such, we highlight more relative upside to semicap equipment vendors, especially AMAT/LRCX who benefit from leading-edge capex/equipment builds.

Our new $500 PO is now based on 2.5x CY27 P/B (vs. 3.0x), still at high-end of historical 1.0-3.0x range, but with a ~20% discount, in-line with other AI compute peers trading at ~20% discount.”

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