KeyBanc analysts raised their profit estimates for Micron Technology on Monday and maintained a "Buy" rating on the memory chip company. Following the announcement, Micron's stock climbed approximately 3% in late trading on Monday. Analyst John Vinh set a price target of $600, suggesting the stock could rise about 60% from recent trading levels. Vinh now forecasts fiscal year 2026 earnings per share of $64.37, up from a prior estimate of $60.18. For fiscal year 2027, the profit forecast was increased from $118.49 to $131.38. The analyst cited robust demand for processors and memory products as the primary reason for the upward revision. Micron produces two main types of memory chips. NAND flash is used for long-term storage in devices like smartphones and solid-state drives. DRAM serves as temporary working memory in computers and data center servers. A recent announcement by Google regarding a new compression algorithm has added further momentum. The technology enhances AI efficiency and reduces memory requirements. However, some analysts believe that improved AI efficiency could ultimately boost overall memory demand. Vinh also noted that DRAM and NAND pricing could increase by 30% to 50% this quarter. New multi-year supply agreements with major cloud service providers include price floors and upfront payments, which may limit downside price pressure during industry downturns.
Comments