Micron (MU) Stock: Analyst Projects Shares Could Double After Monster Earnings Beat
TLDR
- Rosenblatt analyst lifts Micron price target to $500 from $195, projecting over 100% upside after stellar Q1 results.
- Q1 earnings hit $4.78 per share versus $3.96 expected, with revenue jumping 56.6% to $13.64 billion.
- Company forecasts record 68% gross margin for Q2, crushing Wall Street’s 52.1% estimate.
- High Bandwidth Memory revenue reached quarterly record with 2026 supply completely sold out.
- Capital expenditure guidance increased to $20 billion for fiscal 2026 from $18 billion previously.
Micron Technology delivered a quarter that has analysts rewriting their price targets. The memory chip maker posted Q1 earnings of $4.78 per share, crushing the consensus estimate of $3.96. Revenue surged 56.6% year-over-year to $13.64 billion, topping expectations of $12.91 billion.
The results prompted Rosenblatt Securities analyst Kevin Cassidy to jack up his price target from $195 to $500. His forecast implies shares could more than double from current prices. Cassidy ranks as a five-star analyst with a 58% success rate and 21.10% average return per rating.
His math is straightforward. The analyst projects Micron will earn approximately $36 per share in fiscal 2027. Apply a 14× earnings multiple and you land at $500.
Margin Expansion Tells the Real Story
The margin guidance is what really caught Wall Street’s attention. Micron expects a record 68% non-GAAP gross margin in the February quarter. That’s miles ahead of the Street’s 52.1% estimate.
Three factors are driving the expansion. Higher average selling prices for DRAM and NAND are holding firm. The product mix is tilting toward higher-margin chips. Cost reductions continue to flow through.
Memory demand is running ahead of supply. Analysts expect this dynamic to persist through 2027. That gives Micron pricing power it hasn’t enjoyed in years.
HBM Business Firing on All Cylinders
High Bandwidth Memory is the crown jewel right now. HBM revenue notched another quarterly record. The entire 2026 supply is already sold out.
Customers are committing to supply contracts well in advance. That reflects the urgent need for AI-optimized memory chips. This isn’t speculative demand that could evaporate overnight.
Micron responded by raising its fiscal 2026 capital expenditure outlook to $20 billion. The previous guidance was $18 billion. Tight supply conditions are forcing the company to invest in additional capacity.
Needham maintained its Buy rating with a $300 price target. The firm calculated its target using a 2.25× multiple on Q1 fiscal 2028 tangible book value per share. Multiple analysts have revised earnings estimates higher following the report.
The consensus rating on Micron stands at Strong Buy. That’s based on 27 Buy ratings and two Hold ratings. The average analyst price target of $311.68 suggests 25.4% upside potential.
Shares have climbed nearly 196% year-to-date. The stock trades at a P/E ratio of 30.63. Fiscal 2026 earnings estimates sit at $18.04 per share. Revenue growth over the past twelve months reached 48.85%, totaling $37.38 billion.
Cassidy noted that long-term supply agreements could eventually cap price increases. He expects revenue and margin growth to moderate after 2027. The near-term picture through 2026 remains strong based on current supply-demand dynamics.
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