Wolfe Research Raises Micron Price Target to $1,250

Wolfe Research analyst Chris Caso raised the price target on Micron Technology (NASDAQ: MU) to $1,250.00 (from $550.00) while maintaining an Outperform rating.

“Raising memory model and MU estimates, mostly on pricing. We raise our CY26 / CY27 memory model to reflect 200% / 17.5% increases in DRAM pricing and 216%/ 17% increases in NAND pricing, respectively.

We expect bit shipment growth will be limited by cleanroom space at least thru CY27, and leave our CY26 / CY27 bit supply ests mostly unchanged.

We model demand growth above our prior outlook due to stronger server bit shipments, predominantly attributable to agentic / CPU-driven AI inference.

We raise our MU estimates to reflect a ~45% increase in pricing in F3Q, and higher pricing through CY26, and raise our CY27 estimates based on higher HBM pricing.

Our CY27 estimates rise to $226.5bn revenue and $135 EPS. Supply / demand gap thru CY27, at least.

With demand set to exceed supply at least through CY27, and potentially into CY28, we now expect higher pricing to persist for longer.

The time to bring additional manufacturing capacity online in memory is 2-3 years, and in the interim, there simply is not enough cleanroom space to meet AIdriven GPU and CPU demand.

LTAs drive more visibility and better multiples.

We believe LTAs have been / or are in the process of being agreed between all suppliers and major customers for available supply over the next several years.

While there is still some debate about the ability of LTAs to protect suppliers, LTAs with firm commitments will at least ensure that capacity expansion will be driven by real forecasts.

Such agreements have never been before existed in memory, suggesting some multiple expansion opportunity. HBM pricing still a catalyst in CY27.

In addition to higher GB / chip loading, we expect HBM pricing to rise, as suppliers attempt to close the GM gap with overall DRAM GMs.

As HBM price agreements are typically agreed in 2H, and come into effect at the beginning of the following year, we believe this represents a tailwind to CY27 ests.

We model HBM ASPs +20% q/q in C1Q27 on a like-for-like basis.”

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