Micron's $338 Target: The AI Memory Supercycle Is Just Starting

Core Insights - Wall Street shows renewed confidence in Micron Technology, with Morgan Stanley raising its price target to $338 and maintaining an Overweight rating, indicating strong belief in the stock's upward trajectory [3] - The semiconductor sector is experiencing a shift due to an AI-driven memory supercycle, moving away from traditional boom-and-bust cycles [3][4] - The current demand is driven by structural needs from AI infrastructure, requiring high-performance memory, unlike previous cycles that were influenced by temporary product refreshes [4][5] Industry Dynamics - The memory industry has faced a downturn in 2023 due to reduced demand from PCs and smartphones, leading to oversupply and financial losses [4] - The AI revolution is centered around High-Bandwidth Memory (HBM), which is essential for GPUs that train and run AI models, enabling faster data transfer speeds [6] - The surge in demand for HBM is creating a supply shortage for many of Micron's products, indicating a shift towards a more profitable environment for the memory industry [7] Manufacturing Challenges - Producing HBM is significantly more silicon-intensive compared to conventional DDR5 DRAM, which poses challenges to manufacturing capacity [8] - Record financial results and long timelines for new factory construction suggest that the favorable market conditions for Micron are likely to be durable and sustainable [7]