Wall Street analysts like Micron's big earnings beat, with several firms raising price targets following the report. The memory and storage solutions company on Wednesday reported fiscal second-quarter earnings of $12.20 per share and revenue that nearly tripled to $23.86 billion. Both of those results were big beats compared with the consensus estimates. Guidance for the current quarter also beat estimates of analysts polled by LSEG. Surging memory demand thanks to the artificial intelligence buildout continues to support Micron's business, particularly from Nvidia, which uses the company's products for its graphics processing units. Revenue in Micron's cloud memory business was up 160% year over year. Micron CEO Sanjay Mehrotra on the earnings call added that capital expenditures will "step up meaningfully," with construction costs set to increase over $10 billion. Shares of Micron fell more than 6% in premarket trading Thursday, a reaction analysts said they believe is tied to the higher-than-expected capex spending. Bernstein's Mark Li estimated that the company's total fiscal year 2027 capex could be in the $30 billion range. "Higher FY27 capex and peak gross margins concerns (81% > Nvidia 75%) likely induced some profit taking after a strong stock run into the print," wrote Atif Malik of Citi, referencing the stock's recent performance. Micron is the eighth-best-performing stock in the S & P 500 in 2026. Also weighing on the stock, according to analysts, are concerns that the run-up in memory pricing can't last forever, and that the cycle may be coming to an end. But Morgan Stanley's Joseph Moore noted that the artificial intelligence buildout is so great that this may be different from past memory pricing cycles, adding that the industrywide memory shortage will likely continue for some time. Barclays analyst Tom O'Malley said, "We see no indication of this train slowing down in the near term." Analysts also noted the company's first strategic customer agreement with an undisclosed customer for five years, a stretched timeline compared with the company's typically one-year long-term agreements. While some analysts wanted more details regarding the agreement, its length is a change for Micron's customer base and signals the growing importance of memory. "This quarter also signaled a shift in how MU's customers are treating memory — less as a commodity input and more as a strategic asset," wrote JPMorgan analyst Harlan Sur. Bank of America: buy, $500 The bank's price target, up from $400, indicates an 8.2% gain from Wednesday's close. "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… 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%." UBS: buy, $510 The Swiss bank's price target, up from $475, implies a more than 10% gain from Wednesday's close. "We think an important takeaway from the discussion is that memory supply assurance is increasingly being framed as a multiyear strategic priority, rather than a Q/Q dynamic - reinforcing our long held view that memory has become a key performance differentiator within AI hardware platforms." Citi: buy, $510 The bank's price target, up from $430, indicates a more than 10% gain from Wednesday's close. "We believe the big investor debate on the stock is if the stock will continue to rise with rising DRAM prices, like during the Windows PC DRAM cycle in the 1990s, on strong AI demand coupled with limited new fabs outperformance, or moderate in 2Q off a sharp increase in DRAM prices in 1Q. We believe the stock could sustain gains but see money rotation into semi caps N/T on higher capex." Bernstein: outperform, $510 "With only one Strategic Customer Agreement (SCA) signed so far and few details to share, some investors are probably concerned about oversupply risk, but Micron guided supply tightness certainly beyond 2026 and even "nowhere close to ... meet the demand ...for the foreseeable future." Morgan Stanley: overweight, $520 The bank's price target, up from $450, indicates a 12.6% gain from Wednesday's close. "This is not only likely to be durable as long as AI spending is maxed out, at this point based on our industry conversations we think that memory is one of the biggest gating factors on how much AI spending is possible. For three years, we heard others make that case and we disagreed with it, as there was clearly slack in the DRAM supply, but that slack is gone. AI is consuming so much DRAM that there isn't enough left over for other sectors, and everywhere we look we see indications that it is a true bottleneck." JPMorgan: overweight, $550 The bank's price target, up from $350, implies a more than 19% gain from Wednesday's close. "In our view, the incremental earnings story from here is driven less by further gross margin expansion and more by the magnitude of revenue growth ahead, with supply additions still years away and AI-driven demand continuing to broaden across training, inference, and edge workloads. Operating leverage is also a meaningful and (we think) underappreciated driver of earnings: opex has grown modestly from ~$1.0B in F2Q25 to ~$1.4B in F2Q26 even as revenue nearly tripled over the same period, and the May-Qtr guide holds opex roughly flat Q/Q at ~$1.4B against a ~40% revenue step-up, implying operating margins should continue to expand even if gross margins plateau near current levels." Wells Fargo: overweight, $550 The bank's price target, up from $470, indicates a more than 19% gain from Wednesday's close. "Our long-standing +thesis on MU has been underpinned by the belief that the role memory plays in driving the continued evolution of AI infra build-outs will continually expand + deepen (DRAM + NAND / eSSDs). This is further bolstered by MU's SCA engagements. Our increased $550 PT (from $470) now reflects a belief that MU should trade at a ~13-14x P/E on through / mid-cycle EPS at +$40/sh." Deutsche Bank: buy, $550 The bank's price target, up from $500, implies a more than 19% gain from Wednesday's close. "We see this cyclical caution from investors as prudent given past memory bust cycles, and acknowledge that the bear case is difficult to disprove in the near-term (where/when will margins trough?). Nevertheless, with DRAM (both HBM and non-HBM) and NAND bit demand set to grow well above historical levels, we believe such cycle peak fears are immature, and we see a path to more resilient margins for years to come." Barclays: overweight, $675 The bank's price target, up from $450, indicates a more than 46% gain from Wednesday's close. "Blowout quarter and guide bolstered by an extremely tight supply/demand outlook for both DRAM and NAND through CY26. Highlights from the call include the announcement of the company's first 5yr SCA (vs. LTAs of typically 1yr) providing further stability and visibility, along with a significant increase in FCF as mgmt expects cash flows to double Q/Q in FQ3 ($5.5B in FQ2, we model $13.7B in FQ3) despite capex in FQ3 being ~$7B." Goldman Sachs: neutral rating, $400 price target The bank's price target, up from $360, implies more than 13% downside from Wednesday's close. "The DRAM and NAND markets remains very healthy - which should drive continued tailwinds for Micron's business. In addition, the company's product execution continues to improve - with Micron's HBM market share now in line with the company's overall share position. However, we see potential risk of slowing HBM price momentum in 2027 given the prospects of meaningful supply additions in 2027, which keeps us Neutral for now."
