Micron Technology (MU) surged 14% during early trading on Thursday, following its first quarter fiscal 2026 results and outlook that showed artificial intelligence and data center demand driving up memory prices.
“Outsized demand for AI/Data Center is driving a super cycle in memory with demand exceeding supply as F1Q DRAM/NAND pricing increased +20% q/q/mid-teens % q/q,” said KeyBanc analysts John Vinh and Ryan Rosumny in an investor note. “MU noted it expects DRAM/NAND demand to exceed supply through CY26 with q/q growth through the year.”
KeyBanc reiterated its Overweight rating and cranked up its price target to $325 from $215.
“MU has sold out HBM supply through CY26, incl. HBM4, and expects HBM4 to ramp at high yields by C2Q26, meeting the timeline/speed req. (>11Gb/s) of customer product ramp plans [Nvidia (NVDA) Rubin],” Vinh noted. “HBM4 is expected to have a faster yield ramp than HBM3E. Mgmt sees an HBM TAM CAGR of ~40% through CY28, reaching ~$100B in ’28, vs. prior outlook of $100B in ’30.”
Wedbush reiterated its Outperform rating and increased its price target on the stock to $320 from $300 following Micron’s latest results.
“MU is guiding for margins of 68% in FQ2, a new historic high, exceeding 2018 results,” said Wedbush analysts, led by Dan Ives, in a note. “Again, we would point out that while MU GMs in 2018 peaked in the low 60s, that MU’s technology is in a far better position today. As such, arguably any comparison with 2018 should consider industry peak margins, which would suggest upside into the mid-70s (with MU well on its way to those levels).”
Meanwhile, Morgan Stanley reiterated its Overweight rating and its “top pick” status among U.S. semis on Micron. The financial firm also increased its price target to $350 from $338.
“Outside of Nvidia this was likely the best revenue/$ net income upside in the history of the US semis industry, with revenue guidance $3.7 bn above consensus and net income guidance 75% above, with EBIT profitability levels pushing the highest in semis history,” said Morgan Stanley analysts, led by Joseph Moore, in a Thursday investor note.
“Perhaps more importantly, the anecdotes management shared on the earnings call – hyperscalers locking in pricing for multiple years, PC/server companies only getting 70% of their requirements, allocation and line-down situations basically everywhere – matching with the types of anecdotes that lead to us making the stock our top pick, despite some discomfort on valuation through cycle earnings – things are just too good, and too durable, to worry about that as potential earnings power moves north of $40 this year with even further upside possible,” Moore added.
The spike in DRAM and NAND should provide positive momentum across the space for companies such as Samsung (SSNLF), Sandisk (SNDK), Kioxia and SK Hynix. Sandisk shares were up 8% on Thursday morning.
Hard disk drive producers were also trending higher. Seagate Technology (STX) had increased 3.7%, while Western Digital (WDC) was up 4.8%.