Citi Raises Micron Price Target to $1,300, Citing AI Demand and Supply Bottlenecks

Citi analysts have raised their price target on Micron Technology (MU), anticipating the stock will rally ahead of the upcoming SEMICON West conference on the back of favorable memory pricing and tightening supply.

Upgraded Outlook

In a note to clients, the bank lifted its price target on the memory chipmaker to $1,300 from a previous $1,150. The revision was prompted by better-than-expected blended DRAM pricing, leading Citi to increase its estimates for Micron's August and November quarters.

Citi now models fiscal fourth-quarter sales and earnings of $51 billion and $31.45 per share, respectively, which is above the current Wall Street consensus. The bank also stated it expects "upside to results and guidance" when Micron officially reports its earnings.

Supply Constraints to Drive Prices

The SEMICON West conference is seen as the next major catalyst for the stock. Citi anticipates that equipment makers at the event will flag shortages of key components, including DRAM, MLCCs, and printed circuit boards. These bottlenecks could limit both DRAM and NAND supply growth to the low-20% range.

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Combined with strong demand driven by artificial intelligence applications, these supply constraints are expected to keep the memory market undersupplied. Citi noted that strong enterprise SSD demand, fueled by AI inference workloads, should offset softer demand in the consumer NAND market.

Pricing Forecasts

As a result of the tight market conditions, Citi projects a significant rise in memory prices, which it believes will peak in the second quarter of 2027. The bank's model includes the following quarter-over-quarter price increases:

• Blended DRAM ASPs: A 20% increase in the current quarter, followed by a 13% rise in the next.
• Blended NAND ASPs: A 34% increase in the current quarter, followed by a 15% rise in the next.