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- D.A. Davidson raised its Micron target to $3,000 from $2,100, the highest on the Street.
- The firm says memory demand will exceed industry supply through 2027 and 2028.
- Micron shares rose about 3% on Wednesday and traded above $1,000.
D.A. Davidson lifted its Micron price target to $3,000 from $2,100, saying AI memory demand will exceed supply through 2028; MU shares rose about 3% Wednesday.
Lead
Micron Technology (NASDAQ: MU) gained about 3% on Wednesday, October 7, after D.A. Davidson analyst Gil Luria raised his price target on the chip maker to $3,000 from $2,100. The note argues that investors still undervalue how much memory the AI buildout requires. Micron technology stock traded above $1,000 during the session, and the target implies roughly threefold upside from that level.What Did D.A. Davidson Say About Micron?
D.A. Davidson said Wall Street is still early in recognizing Micron's ultimate valuation. It also described AI as having turned memory into a durable growth business rather than a cyclical one.
The new target rests on a 19 times earnings multiple, up from 13 times in the prior model. Memory makers have historically been valued at low multiples because of repeated boom-and-bust pricing. The firm is now applying a higher multiple on the view that AI infrastructure spending changes that pattern.
Why Is AI Memory Demand Outrunning Supply?
AI memory demand is outrunning supply because accelerator makers and cloud operators are buying high-bandwidth memory (HBM) and DRAM faster than the industry can add capacity. Memory capacity directly affects the speed, accuracy and context length of AI models, so data center operators treat it as a constraint on their own growth.
Micron's latest results show the effect. Fiscal fourth-quarter revenue reached a record $54.23 billion, up 379% from a year earlier and 31% from the prior quarter. Adjusted earnings were $33.42 a share, above the $31.16 consensus. Fiscal 2026 revenue totaled $133.2 billion, up 256%, with gross margin expanding to 81.1% from 41.1% a year earlier.
Management guided fiscal first-quarter 2027 revenue to $61.5 billion, plus or minus $1.5 billion, with adjusted earnings of $38.15 a share. The company has said supply of AI memory products will stay tight through at least 2027. Micron is also seeking to place about half of its sales under long-term, non-cancellable contracts, which would improve revenue visibility and dampen the industry's traditional price swings.
Market Reaction
The 3% gain follows a quieter stretch for the shares, which had slipped about 4% over the prior week. The stock has risen several-fold over the past year, and Micron crossed a $1 trillion market capitalization on May 26, 2026. Among AI stocks, it has become one of the most closely watched proxies for memory scarcity.
What Are the Risks to the Bullish Case?
The main risk is supply catching up with demand. New fabrication capacity from Micron and its competitors is scheduled to come online between 2027 and 2030, and memory pricing has historically reversed once supply expands. Capital spending is also rising, with Micron planning roughly $25 billion in the first half of fiscal 2027. A possible labor strike in Taiwan is a further operational variable.
What Comes Next for Micron Technology Stock?
The next test is Micron's fiscal first-quarter report, which will show whether revenue reaches the $61.5 billion guide and whether margins hold near current record levels. Capacity announcements from rival memory makers and the share of Micron's revenue locked under multi-year contracts will determine how far the higher valuation multiple is sustained.
Outlook
D.A. Davidson's $3,000 target is the highest on the Street and rests on two points: AI memory demand outpacing supply through 2028, and a structurally higher valuation for memory makers. Record fiscal fourth-quarter results and a $61.5 billion first-quarter revenue guide support the demand case. Timing of new industry capacity is the main variable in the supply picture.
Mentioned tickers: MU