Micron Technology (MU) stock fell 4% on Thursday as investors weighed rising US Treasury yields and higher crude oil prices ahead of the memory chipmaker’s fiscal fourth-quarter earnings report on Sept. 30.
Despite the decline, Baird raised its price target on Micron to $1,520 from $1,280 while reiterating its outperform rating. The new target implies about 40% upside from Friday’s close.
Baird analyst Tristan Gerra said the firm was “incrementally positive on Micron near- and medium term” because of rising demand for agentic artificial intelligence, slower expected DRAM supply growth across the industry in 2027 and a higher-margin outlook for high-bandwidth memory next year.
Micron shares have risen sharply in 2026 alongside other memory stocks, supported in part by a shortage of memory chips.
The stock is up 279% this year and reached an intraday record of $1,255 on June 25.
AI demand supports Micron’s DRAM outlook
Micron is benefiting from growing demand for high-performance memory as artificial intelligence adoption increases.
AI systems process large amounts of data and require memory with greater capacity and bandwidth, supporting demand for DRAM in AI servers and other high-performance computing systems.
DRAM is expected to be Micron’s biggest growth engine in the fourth quarter.
The Zacks Consensus Estimate puts DRAM revenue at $38.26 billion, representing a 325.8% increase from the year-ago quarter.
The expected growth comes alongside improving conditions in the broader memory market.
The industry had previously faced excess supply, weak pricing, and elevated inventories, but those conditions have improved, resulting in a healthier balance between supply and demand.
The combination of stronger AI demand and improved pricing conditions is expected to support DRAM revenue and profitability in the quarter.
HBM becomes increasingly important
High-bandwidth memory has become another important part of Micron’s AI growth outlook.
AI accelerators use HBM to provide the high memory bandwidth required for increasingly complex workloads.
Micron is mass-producing HBM for NVIDIA’s next-generation AI chips, giving the company exposure to growing demand for AI infrastructure.
HBM supply remains relatively tight, while demand from AI data centres continues to increase.
Micron has also highlighted strong demand for HBM4.
Its HBM4 12-high ramp is progressing faster than the earlier HBM3E 12-high ramp, potentially increasing HBM’s contribution to revenue and profitability over time.
Baird’s Gerra also pointed to a higher margin profile for HBM next year as one of the factors supporting the firm’s positive view of Micron.
NVIDIA, AMD and Marvell partnerships support AI exposure
Micron’s relationships with major semiconductor companies provide exposure to several AI platforms.
NVIDIA has selected Micron as a major HBM supplier for its Blackwell GPUs and Vera Rubin AI platform.
Micron also supplies HBM3E products for Advanced Micro Devices’ Instinct MI350 AI accelerators.
The company is also working with Marvell Technology on advanced memory solutions for AI applications.
Marvell’s focus on custom AI silicon provides another potential avenue for Micron to participate in the expansion of AI infrastructure.
Micron’s fiscal fourth-quarter results are due Wednesday.
LSEG consensus expects earnings to rise 939% year over year. Analysts remain broadly positive, with 46 of 49 analysts tracked by LSEG rating the stock a buy or strong buy.
The average analyst price target implies about 34% upside.
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