TD Cowen expects Micron's stock to rise by more than 50%. What new growth driver has the bank identified?
Analysts are revising their forecasts for memory manufacturers, as demand for their chips is no longer subject to market cycles and has become steady
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TD Cowen expects shares of memory manufacturer Micron Technology to rise by 53%—even after a rally of nearly 250% this year. The bank’s analysts have more than doubled their previous price target, citing sustained demand for memory, according to TipRanks. Previously, demand was cyclical—that is, it depended on market ups and downs—but now it has become constant due to the widespread adoption of AI, according to TD Cowen.
Details
TD Cowen analyst Krish Sankar raised his price target for memory chip maker Micron Technology from $660 to $1,500, while maintaining his “buy” rating on the stock, according to CNBC. The new target is 53% higher than the stock’s closing price on June 12.
Historically, the market has viewed Micron as a cyclical memory manufacturer whose profits can plummet once the latest period of shortages in DRAM and NAND flash memory comes to an end, explains Barron’s. But now investors are beginning to view the company as a more stable business thanks to long-term supply agreements that make future earnings more predictable. As a result, the forward P/E ratio—which reflects the relationship between the stock price and expected annual earnings—has risen from 4.4 in April to 11.5, the publication notes.
“If this were a typical DRAM market cycle, we would say that stocks are nearing their peak, since memory manufacturers’ stocks usually peak 3–8 months before server memory prices reach their peak,” Sankar wrote in a note to clients cited by CNBC. “We expect such a peak around the third quarter of calendar year 2026. However, the role of memory in the AI era is structural, not cyclical.”
According to the analyst, the rise in demand for central processing units (CPUs) driven by the popularity of AI agents has bolstered investor confidence that high memory prices will persist into the second half of the year, which should support Micron’s stock. Demand for memory for AI chips also remains stable, with the manufacturer signing contracts several years in advance. “As production capacity utilization increases, HBM memory is becoming a factor capable of radically changing the supply situation, since its production requires significantly greater capital investment—roughly three times more than the production of traditional memory,” the analyst added.
Micron's stock jumped 11% to $1,088 during Monday's trading session. From the start of the year through the close of trading on June 12, the company's stock price had surged 244%.
What other analysts are saying
Wall Street is struggling to keep up with Micron’s rally, according to Barron’s. As recently as late May, the average target price among analysts tracked by MarketWatch stood at $685.8. It has now reached $942, but even that figure is below the company’s current share price.
On June 15, RBC Capital analyst Srinni Pajuri raised his price target for Micron shares from $525 to $1,200, while maintaining a “buy” rating, according to Investing.com. The bank expects a longer growth cycle in the memory market thanks to sustained demand for AI infrastructure.
On June 10, Goldman Sachs analyst James Schneider also raised his price target,
according to Barron’s, but the new target is far less optimistic—$900. Schneider maintained a neutral rating, meaning he advises neither selling the company’s shares nor increasing holdings. He believes Micron’s stock is overvalued.
According to MarketWatch, 46 out of 49 analysts have a "bullish" stance on the chipmaker, and only one recommends selling the stock.
This article was AI-translated and verified by a human editor
