Micron Falls 1.7% Amid Analyst Target Hikes on AI Demand

Micron Technology shares dropped 1.7% on Tuesday, trimming part of a near 10% gain from Monday after a volatile week that included about a 20% slide across two trading days last week, with a 13% decline on Friday.

Wall Street analysts raised 12-month price targets this week while keeping bullish ratings. Cantor Fitzgerald’s CJ Muse raised his target to $1,500 from $700. Wells Fargo increased its target to $1,220 from $550. Goldman Sachs lifted its target to $900 from $400 and raised its revenue and non-GAAP EPS estimates for fiscal 2026 and 2027 by roughly 28% and 36% on average.

UBS analyst Timothy Arcuri projected Micron’s fiscal third-quarter results could exceed company guidance, forecasting $36 billion in revenue and $20.96 in earnings per share for the May quarter. UBS attributed much of the expected upside to higher prices rather than a large increase in shipment volumes.

UBS estimated DRAM revenue at $28.1 billion, driven by a 3% rise in bits shipped and a 45% jump in average selling prices quarter-over-quarter. The firm forecast NAND revenue of $7.9 billion, with shipments up 5% and average selling prices up 50%. UBS projected HBM revenue of $2.9 billion and core DRAM revenue excluding HBM at $25.2 billion.

For Micron’s fiscal fourth quarter, UBS forecast $43.1 billion in revenue and $25.64 in EPS, and estimated that gross margins could approach 90% by the second half of calendar 2027. UBS maintained a Buy rating and a $1,625 price target and wrote it was “only a matter of time” before investors applied a more traditional valuation multiple given structural shifts from AI demand.

Analysts linked the target increases to rising demand for high-bandwidth and high-density memory driven by artificial intelligence workloads, as well as constrained supply for advanced memory types. The rebound in semiconductor sentiment followed an announcement of a multi-year partnership between Nvidia and SK Hynix to develop next-generation AI memory products.

Micron has been certified as an HBM4 supplier for Nvidia’s Vera Rubin platform and has committed its entire HBM production capacity for the remainder of fiscal 2026 under long-term contracts, providing secured revenue in a segment that serves next-generation AI systems.

Short-term trading remained volatile as investors weighed rapid recent gains and losses and broader economic factors that affect semiconductor demand. Banks’ longer-term forecasts assume sustained AI demand and limited near-term capacity expansion for advanced memory.