Micron’s Soaring Price Target Signals Unprecedented AI Demand

The artificial intelligence revolution is creating unprecedented strain on hardware manufacturers, with demand showing no signs of slowing. While much attention focuses on processors, a critical shortage is emerging in the memory chips essential for AI systems—a development that could significantly drive stock valuations. Morgan Stanley now identifies Micron as possessing potential that stands apart on Wall Street, suggesting the chip giant may be approaching a historic reassessment.

Current market enthusiasm stems from a bold declaration by Morgan Stanley, where analyst Joseph Moore elevated his price target for the memory chip manufacturer to an impressive $338. This represents the highest such valuation currently found across Wall Street.

From present trading levels, this projection implies approximately 50 percent additional upside potential. The investment bank consequently reaffirmed its "Overweight" recommendation. This optimistic outlook is driven by a dramatic shift in market conditions: the supply of memory chips is tightening considerably faster than industry experts had previously anticipated.

Capacity Fully Committed Through 2026

This situation extends beyond mere speculation. A critical shortage of high-performance hardware for AI infrastructure is developing, with particular pressure points in two key areas:

Should investors sell immediately? Or is it worth buying Micron?

• DDR5 Shortages: Buyers are encountering significant difficulties securing sufficient high-speed server memory, even when willing to pay premium prices.
• HBM Allocation Exhausted: Regarding specialized High Bandwidth Memory (HBM), Micron's inventory is effectively sold out through the end of 2026.

This fundamental supply-demand imbalance grants the company substantial pricing authority, which directly translates to improved profit margins. Unlike previous industry cycles, this expansion is not propelled by volatile consumer electronics but by structural demand from data centers.

Structural Shift Underway

Financial results support this bullish outlook. Record revenues and substantially improved gross margins indicate that Micron may be moving beyond the memory sector's notorious "boom-and-bust" pattern.

Having already delivered an impressive rally with gains exceeding 130 percent since the start of the year, the stock currently trades around $196. However, if analyst projections prove accurate and the AI-driven memory scarcity persists, the current price level may represent just the beginning of a longer-term upward trajectory.