AI Drives Growth in Memory Chip Market
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Should l Buy MU?
Source: Fool
- Micron's Stock Surge: Micron Technology's stock price surged 571% over the past year to $542, yet analyst CJ Muse from Cantor Fitzgerald believes it remains undervalued with a target price of $700, indicating a 29% upside, showcasing the strong demand for memory driven by the AI era.
- SanDisk's Impressive Performance: SanDisk's stock skyrocketed 3,350% in the past year, currently priced at $1,187, with a target price of $1,800 suggesting a 52% upside, reflecting its robust performance in the NAND flash memory market and ongoing market share growth.
- Memory Price Surge: The unprecedented demand for memory in AI data centers has led to DRAM and NAND contract prices increasing approximately sevenfold over the past year, resulting in a supply shortage that further solidifies Micron and SanDisk's market positions.
- Future Growth Expectations: Despite the cyclical nature of memory chip sales, analysts expect Micron's adjusted earnings to grow 13% annually through fiscal 2029, while SanDisk's earnings are projected to increase at a 25% annual rate, indicating strong growth prospects for both companies in the AI-driven market.
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Analyst Views on MU
Wall Street analysts forecast MU stock price to fall
26 Analyst Rating
24 Buy
2 Hold
0 Sell
Strong Buy
Current: 666.590
Low
235.00
Averages
336.12
High
500.00
Current: 666.590
Low
235.00
Averages
336.12
High
500.00
About MU
Micron Technology, Inc. provides memory and storage solutions. The Company delivers a portfolio of high-performance dynamic random-access memory (DRAM), NAND, and NOR memory and storage products through its Micron and Crucial brands. The Company's products enable advancing in artificial intelligence (AI) and compute-intensive applications. Its segments include Cloud Memory Business Unit (CMBU), Core Data Center Business Unit (CDBU), Mobile and Client Business Unit (MCBU) and Automotive and Embedded Business Unit (AEBU). CMBU is focused on memory solutions for large hyperscale cloud customers, and high bandwidth memory (HBM) for all data center customers. CDBU is focused on memory solutions for mid-tier cloud, enterprise, and OEM data center customers and storage solutions for all data center customers. MCBU is focused on memory and storage solutions for mobile and client segments. AEBU is focused on memory and storage solutions for the automotive, industrial, and consumer segments.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Order Volume Surge: Total orders rose by 27% to 933 million, with marketplace gross order value jumping 37% to $31.6 billion, indicating that the company is not only adding orders but also capturing larger ones, particularly in the fast-growing grocery and retail categories.
- Profit Pressure Intensifies: Despite revenue growth, diluted EPS fell from $0.44 to $0.42, primarily due to integration costs from Deliveroo and ongoing investments in autonomous delivery, highlighting the profit pressures faced during expansion.
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- Spending vs. Revenue Growth: Amazon's recent shareholder letter indicates that its capital spending will be monetized over the next two years based on solid customer commitments, alleviating investor concerns about spending not matching revenue opportunities and demonstrating strong market demand.
- Market Rebound: Despite uncertainties like the war in Iran, AI stocks have rebounded due to improved valuations and strong earnings; with progress toward a peace agreement, the market outlook is becoming more favorable, further boosting investor confidence in AI stocks.
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- Revenue Growth Signals: Amazon's recent shareholder letter indicates that much of its 2026 capital spending will be monetized over the next two years based on solid customer commitments, demonstrating the effectiveness of its investments and strong market demand, alleviating investor concerns.
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