5-star analyst sets jaw-dropping Micron stock price target for 2026

Micron (MU) banal traded astir $966 connected August 14, according to Yahoo Finance, extending a crisp snapback that pushed its shares backmost to the psychologically important $1,000 level.

Investors are weighing a mates of antithetic signals.

For perspective, Micron banal has much than tripled this year, up astir 240% year-to-date, blowing past the S&P 500's 14% gain, according to Seeking Alpha.

However, the banal is inactive implicit 20% beneath its late-June peak, portion fast-growing upstarts similar China's YMTC person present overtaken Micron successful planetary NAND shipment share, according to CNBC. 

At the aforesaid time, the underlying representation marketplace remains remarkably tight, with Yahoo Finance reporting that overmuch of Micron's 2027 capableness has already been allocated arsenic AI request surges past supply.

That raises the question surrounding Micron: Is this inactive different representation rhythm destined to reverse?

In a caller note, New Street's Pierre Ferragu progressively thinks investors are asking the incorrect question portion slapping an eye-popping terms people connected Micron stock, arsenic reported by Investing.

New Street expert Pierre Ferragu dramatically raised his outlook for Micron stockHeather Ainsworth/Bloomberg via Getty Images

Ferragu says halt valuing Micron similar aged Micron

5-star expert Pierre Ferragu upgraded Micron banal to Buy from Neutral, aggressively raising its terms people to $1,250. 

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Compared to Thursday's closing terms astatine $949.83, the caller people implies a superb 32% upside.

For decades, the representation abstraction fundamentally followed a boom-and-bust cycle. Demand would rise, starring to a pricing explosion, and erstwhile representation giants expanded production, oversupply could nonstop prices tanking. 

Investors knew highest net mightiness vanish quickly; they avoided putting precocious multiples connected them. Ferragu feels that the model is breaking down owed to AI. 

AI has efficaciously changed some the quantity and prime of representation demand.

HBM isn't simply much DRAM; that's portion of different PC cycle. It is an indispensable portion of costly AI accelerators, including the likes of Nvidia, Google, Amazon, Meta, and different giants that necessitate tremendous amounts of highly high-performance memory.

According to New Street, AI would yet signifier astir two-thirds of representation demand. Even beyond 2030, the steadfast models representation request increasing astatine an awesome 15% annually, compared with astir 10% historically.

Why HBM changes the economics 

Ferragu argues that dissimilar DRAM, which is volatile, HBM deserves a valuation premium arsenic it's structurally little cyclical.