Artificial intelligence stocks have delivered some of the market’s biggest gains over the last few years, and few companies have benefited more than Micron Technology (NASDAQ: MU).
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Fueled by surging demand for AI infrastructure, data centers, and high-bandwidth memory solutions, Micron has emerged as one of the semiconductor industry’s biggest winners. The company’s advanced DRAM and NAND memory products have become critical components in AI servers, helping drive significant revenue growth and investor enthusiasm.
As a result, Micron shares have soared as demand for memory chips continues to outstrip supply. However, with the stock approaching record highs and earnings scheduled for June 24, investors are beginning to ask an important question: Can Micron’s AI-fueled rally continue, or is the market becoming too optimistic? While analysts remain largely bullish on the company’s long-term prospects, some Wall Street firms are warning that soaring memory prices and supply shortages may not last forever.
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Micron has been one of the market’s standout winners
In fact, since bottoming out at around $312 in March, the tech giant is now up to $1,072.17. All thanks to substantial demand for artificial intelligence, which has triggered massive shortages and price hikes for its high-performance memory chips. Now, as it heads into earnings on June 24 after the bell, it’s still gaining a good deal of momentum.
In addition, as noted by Barron’s, “The latest sign of the memory-supply crunch came last week when the new head of the Xbox videogame console division at Microsoft warned in a publicly released memo that the unit was facing a “hardware component crisis.” Xbox CEO Asha Sharma said memory costs have risen roughly fivefold over the past two years and the company is unable to make as many consoles as consumers want.”
Even better, most analysts are bullish. TD Cowen, for example, just raised its price target on Micron to $1,500 from $660, with a buy rating. The firm cited strong demand for dynamic random-access memory (DRAM), which continues to outpace supply by a wide margin.
Goldman Sachs Highlights Risks Despite the Rally
Goldman Sachs did raise its price target on Micron to $900, but kept a neutral rating on the stock. The firm noted, “We believe investor positioning remains very bullish given the dramatic share price run-up and optimism around the potential impact of long-term customer agreements,” they wrote, as quoted by Barron’s. The firm expects “Micron’s earnings—currently boosted by surging demand for high-bandwidth memory (HBM) in artificial-intelligence hardware—to peak in fiscal 2027 at $138.86.”
In addition, DRAM prices have quadrupled over the last year. However, those costs are likely to come down as major memory chip manufacturers, such as Samsung and SK Hynix build new fabrication plants to boost production capacity. When supply again overtakes demand, stocks like Micron could easily reverse lower.
History is also proof investors should be cautious.
Between 2022 and 2023, the memory crash led to Micron reporting a GAAP net loss of $2.31 billion in just one quarter, as noted by Trefis. “During 2018 and 2019, cloud operators over-ordered memory through 2017, then steadily reduced purchases through 2018 as inventories swelled. NAND prices fell roughly 60% and DRAM approximately 40%. Micron peaked near $64 in May 2018 and fell to around $28 by year-end,” they added.
With Micron set to report earnings on June 24, investors will be closely watching guidance, demand trends, and management’s outlook for AI-related memory products. The results could help determine whether the stock has further room to run—or whether expectations have become too elevated after one of the semiconductor sector’s most impressive rallies.
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