Micron's Record Quarter Has Wall Street Hiking Price Targets Again

Micron just posted its sixth straight record quarter — and the stock still fell. That disconnect tells you something important about where this cycle is headed next.

Shares of Micron (NASDAQ: MU) slipped 1.7% to $1,046.79 on Thursday even as the chipmaker reported fiscal fourth-quarter revenue of $54.2 billion, up 379% year over year. Non-GAAP earnings of $33.42 per share beat the $31.35 consensus estimate, and gross margin hit 87%, a 210 basis point jump from the prior quarter.

The pullback isn't about weak numbers. It's about investors trying to figure out how long this memory boom can realistically run.

Wall Street, for its part, isn't waiting around to find out. Goldman Sachs raised its price target on Micron to $1,250 from $1,100. Mizuho moved to $1,400. Rosenblatt went furthest, lifting its target all the way to $1,900 — nearly double where the stock traded Thursday. Morningstar was the outlier, trimming its fair-value estimate to $700 from $850 on concerns the cycle could fade faster than bulls expect.

The bull case rests on one simple fact: more than 75% of Micron's 2027 output is already spoken for. The company has locked in 26 strategic customer agreements covering over 35% of revenue through 2030, with some deals stretching into 2031. Remaining performance obligations total roughly $150 billion.

"Even at floor prices, we expect margins meaningfully above any prior cycle peak margins." — Mark Murphy, CFO, Micron Technology

CEO Sanjay Mehrotra went further on the earnings call, telling investors that tightness in memory supply isn't close to easing. "In calendar 2027 as well as 2028, we see demand exceeding supply," he said. "In fact, we see greater tightness in the industry in 2027 and in 2028 versus 2026."

That matters for anyone holding or considering MU shares, because it pushes back the timeline on new supply hitting the market. Micron's new cleanroom capacity doesn't come online until late 2028 at the earliest, meaning the current pricing power sticks around longer than some bears assumed.

Here's the number that should grab a retail investor's attention: at current prices, Micron trades at roughly 7 times forward earnings. If the company holds forward EPS near $200 — plausible given the guidance — and the market eventually re-rates the stock to a 10x multiple instead of today's 6-7x, that points toward a $2,000 share price.

That's not a guarantee. It's a bet on the memory cycle staying strong through 2028, which isn't risk-free. First-half fiscal 2027 capex runs about $25 billion, startup costs are climbing as new plants ramp, and Netlist has filed an ITC complaint seeking to ban some of Micron's HBM imports — a legal overhang worth watching.

For investors looking to get involved, Micron starts returning 100% of excess cash to shareholders beginning December 9, with a modest $0.15 quarterly dividend already in place. Watch whether Q1 gross margins hold near that 86% guidance, how many new supply agreements get signed in the next few months, and whether management sizes up the next buyback authorization.

Zoom out and the setup looks unusual for a chip name this deep into a boom: a sub-10 forward multiple, a dividend that's just getting started, and a buyback pledge layered on top. That combination doesn't show up often in a stock that's already up this much year to date, which is exactly why Wall Street keeps revising targets higher instead of calling the top.

Micron's story right now is straightforward: record profits, a supply crunch that isn't going away soon, and a valuation that still looks cheap relative to where the earnings could land. The stock's dip on good news is a reminder that this trade comes with volatility — Micron's beta sits above 2 — so position sizing matters as much as conviction here.