Micron (MU): Analyst Sees AI Tailwinds, Limited Upside

Core Insights - Micron Technology is experiencing growth due to increasing demand for artificial intelligence and strict supply discipline in the memory industry [1][3] - BofA Securities raised the price target for Micron to $180 from $140 while maintaining a Neutral rating, indicating that much of the stock's upside is already reflected in its price [1][2] - The company is benefiting from high bandwidth memory (HBM) sales and a resurgence in traditional server CPU sales driven by agentic AI [3] Financial Performance - Micron's gross margin is projected to be 51.5% in FQ1, which is 600 basis points above consensus estimates, indicating strong pricing power [3] - FY26 and FY27 earnings estimates have been raised significantly by 38% and 56% to $16.28 and $17.55 respectively [3] Market Dynamics - The memory industry is experiencing abnormal supply discipline, which has led to increased pricing in both traditional and new memory markets [3] - The entry of Samsung into the HBM market could potentially impact Micron's market share and pricing in CY26 [3] Competitive Landscape - The strength in AI is seen as beneficial for other companies such as NVIDIA (NVDA) and Broadcom (AVGO), while traditional server CPU strength is positive for AMD [3] - There is potential for increased memory capital expenditures, which could positively affect Applied Materials (AMAT) and Lam Research (LRCX) [3]