Micron Technology’s Stock Surge Fueled by Unprecedented Chip Demand

The relentless climb in Micron Technology's share price finds its foundation in a powerful and seemingly unstoppable market dynamic: the soaring cost of memory semiconductors. Industry analysts are forecasting an additional 40% price increase in 2026, building upon an already robust 2025. This trend is primarily driven by the global artificial intelligence boom, which is compelling data center operators worldwide to undertake significant capital expenditure.

Current production capabilities at the Idaho-based firm are meeting only 50% to 66% of the demand from its core customers. In a direct response to this supply gap, Micron announced in December an increase in its capital investment plans for the current fiscal year, raising the figure from $18 billion to $20 billion. This capital is earmarked for expanding output of High-Bandwidth Memory (HBM) and the latest generation of DRAM chips.

In a significant disclosure, Chief Executive Sanjay Mehrotra stated that the company’s entire HBM production capacity for calendar year 2026 is already fully allocated under binding supply agreements, which lock in both volumes and pricing. The total addressable market for HBM is now projected to reach approximately $100 billion by 2028—a milestone expected two years sooner than previous estimates.

Wall Street's Bullish Stance

Financial institutions have responded with a series of elevated price targets, reflecting strong confidence in Micron's trajectory. Analysts at Rosenblatt Securities have set a target of $500 per share. Both Morgan Stanley and JPMorgan have established targets at $350. In early January, Bernstein Research raised its objective from $270 to $330, citing structurally higher chip prices due to persistent supply constraints.

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

Record-Breaking Quarterly Performance

The company's most recent financial results underscore the strength of the current market cycle:

• Revenue: $13.64 billion (a year-over-year increase of 56.7%)
• Earnings Per Share (EPS): $4.60 (surge of 175% compared to the prior year)
• DRAM Revenue: $10.8 billion (growth of 69% year-over-year)

Looking ahead, management guidance for the second fiscal quarter anticipates revenue near $18.7 billion and EPS around $8.42. This projected profit per share represents a potential fivefold increase compared to the same period last year.

The investment community’s next key checkpoint arrives with the quarterly report scheduled for mid-March 2026. This update will provide critical evidence on whether the anticipated price increases are materializing and if Micron's aggressive production expansion is proceeding according to plan.