Baird Reiterates Micron Technology's Stock Rating, Optimistic About The Tightening DRAM Supply Outlook!

Baird reiterated Micron Technology's outperformers rating, with a target price of $1,520. Baird pointed out that Micron Technology expects DRAM supply to tighten significantly in fiscal years 2027–2028 compared to fiscal year 2026, a trend likely to drive stock revaluation.

Micron Technology expects the DRAM industry's bit bit growth rate for the 2027 and 2028 calendar years to remain in a low range just above 20%. Baird forecasts a calendar year growth rate of 20% for 2027, and with a large amount of new capacity coming online from Micron Technology and competitors, the 2028 calendar year growth rate will exceed 30%. Starting from the February quarter, gross margins will resume sequential expansion and continue to improve throughout fiscal year 2027. With estimates that 40% to 50% of hyperscale cloud providers have already signed customer supply agreements, the expansion is expected to be moderate. Micron Technology's gross margin over the past twelve months has reached 80.72%, fully demonstrating its strong pricing power.

Micron Technology reported strong results, with revenue and profit both exceeding analyst expectations. The company's fourth-quarter earnings per share and first-quarter guidance both exceeded market consensus expectations, with Q1 revenue forecast at $6.15 billion and earnings per share.

at $38.2. This impressive performance prompted multiple analyst firms to raise their outlook for Micron Technology. CLSA reiterated its outper-market rating and maintained a $1,700 target price due to strong memory chip pricing.

DA Davidson raised the price target from $2,000 to $2,100, maintained a Buy rating, and emphasized that storage market supply may tighten further in 2028, with supply shortages expected to persist into 2028. UBS also reiterated its Buy rating with a target price of $1,625, emphasizing the fundamental value of memory chips in the AI environment and capital returns. These developments reflect that, against the backdrop of continued tightening supply, institutions generally remain optimistic about Micron Technology's future performance.

Market Insight:

Micron expects the supply-demand balance for memory chips to remain tight over the next two years. Capital expenditure for fiscal year 2026 is $27 billion, a 95% year-over-year increase; The company also expects capital expenditure for fiscal year 2027 to exceed $50 billion, with most of the increment going toward cleanroom space construction to meet production needs for the 2028–2030 calendar year.