Micron analysts parse updated outlook and tweak stock price targets | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Now that’s a DRAM good idea.

Dynamic Random Access Memory provides temporary storage for data a computer is actively using.

DRAM is crucial for efficient computing because it enables the central processing unit — the computer segment that executes instructions — to quickly access frequently used information, making applications run faster and more smoothly.

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The global market for memory chips was valued at $240.77 billion last year and is expected to more than triple to $791.82 billion by 2033, according to the consultancy Imarc Group.

The Asia-Pacific region currently dominates the market, holding a share of 39.4% in 2024 due to its strong manufacturing base, technological improvements, and robust consumer electronics industry.

The region’s significant investments in research, along with its role as a hub for semiconductor production, further solidify its dominance, Imarc said.

Micron Technology (MU) has seen a dramatic surge in DRAM sales.

Micron Technology CEO Sanjay Mehrotra said AI adoption remained a key driver of DRAM content growth for smartphones. (Photo: Mandel Ngan/AFP via Getty Images)

MANDEL NGAN/Getty Images

Micron CEO Mehrotra: AI adoption ‘a key driver’

The Boise, Idaho, company, which makes memory and storage chips for data centers, computers and smartphones, boosted its fiscal-fourth-quarter-earnings outlook, citing improved DRAM pricing and strong execution.

Micron, the largest U.S.-based memory-chip manufacturer, now expects to earn an adjusted $2.85 a share on revenue of $11.2 billion in the quarter ending Aug. 28.

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Analysts were looking for earnings of $2.51 a share on revenue of $10.75 billion.

Micron had previously guided to fiscal Q4 adjusted earnings of $2.50 a share on sales of $10.7 billion. In the year-earlier quarter the company earned an adjusted $1.18 a share on revenue of $7.75 billion.

Micron’s fiscal third-quarter revenue DRAM reached $7.1 billion, up 51% from a year earlier and accounting for 76% of its total.

“AI adoption remains a key driver of DRAM content growth for smartphones, and we expect more smartphone launches featuring 12 gigabytes or more compared to eight gigabytes of capacity in the average smartphone today,” Micron CEO Sanjay Mehrotra told analysts during the third-quarter-earnings call in June.

Mehrotra said the company had completed “a strategic reorganization of our business units around key market segments to capitalize on the tremendous AI growth opportunity ahead.”

The company, which beat Wall Street’s fiscal-Q3 earnings and revenue forecasts, said data-center DRAM revenue had reached a record for a fourth consecutive quarter.

Chris Versace, lead manager for the TheStreet Pro’s portfolio was impressed with Micron’s revised guidance.

“That is the latest in a string of positive data points that inform us [that] demand for AI and data center chips is robust,” he wrote in his Aug. 11 column. “It may also confirm that the expected seasonal strength in smartphones and PCs is starting to play out.”

Analyst notes improving DRAM sales

Versace said that over the past few weeks he and the rest of the market digested the prospects for higher capital spending levels from Meta (META) , Alphabet (GOOGL) , Microsoft (MSFT) and Amazon (AMZN) .

“Last week, July revenue reports from Taiwan Semiconductor (TSM) and Foxconn (FXCOF) underscored the ongoing strength in AI and data center demand, with Foxconn sharing that it sees its connected device end market entering the peak season in [second-half] 2025,” he said.

“We see all the above as positive for our shares of Nvidia (NVDA) and Marvell (MRVL) , as well as incrementally constructive for Qualcomm (QCOM) , Universal Display (OLED) and Apple (AAPL) shares,” Versace added.

Micron shares are up 46% this year and up 32% from this time in 2024.

Mizuho raised its price target on Micron to $155 from $150 and affirmed an outperform rating on the shares after the company raised its August-quarter guidance for revenue, gross margin and EPS, citing “improved pricing, particularly in DRAM, and strong execution,” according to The Fly.

The investment firm sees continued strength in legacy DRAM pricing into the second half and high-bandwidth memory driving a five-times bump in average selling price from traditional DRAM. It said it would be buyers on any pullback in the stock price, seeing the DRAM memory market being “stronger for longer.” (HBM is used for high-performance applications including artificial intelligence and graphics processing.)

JP Morgan boosted its target on Micron to $185 from $165 and maintained an overweight rating on the shares. The company issued a positive preannouncement on a strengthening pricing environment, the investment firm said. JP Morgan calls Micron well positioned for fiscal 2026.

And Deutsche Bank raised its target on Micron to $155 from $150 and reiterated a buy rating, based on Micron’s outlook for stronger DRAM pricing. Deutsche Bank added that Micron was confident it could sell out its 2026 high-bandwidth-memory supply.