Citigroup Adjusts Price Target on Micron Technology to $1,300 From $1,150, Maintains Buy Rating

Citi raised its price target on Micron (MU) to $1,300, citing better DRAM pricing and expectations of supply constraints. The bank forecasts Q4 sales of $51B and EPS of $31.45, above consensus. Micron's stock has rebounded 34% from its July low. Citi anticipates equipment shortages and strong AI-driven demand to support memory prices into 2027.

Citi raised Micron's (MU) price target to $1,300 from $1,150, citing strong DRAM pricing and market undersupply. UBS maintained a 'Buy' rating with a $1,625 target, expecting robust demand and share repurchases. MU shares rose 4.5% to $1,094. Analysts forecast Q4 2026 revenue of $52B and Q1 2027 revenue of $58B-$59B.

Nvidia's supply commitments surged to $279B, driven by memory needs, impacting its gross margins (75% in Q2, expected to drop to 71%-72%). Micron, a key memory supplier, reported strong fiscal Q3 results ($41.46B revenue, $28.24B net income) and high margins (83%-87%). Micron's HBM4 memory is critical for Nvidia's AI chips, creating a supply bottleneck. Micron's CEO noted HBM's high wafer consumption limits conventional DRAM supply, affecting industries like smartphones.

NVIDIA CEO Jensen Huang highlighted memory and silicon photonics as AI bottlenecks, with Micron, Coherent, and Tower Semiconductor positioned to benefit. Micron leads in high-bandwidth memory, Coherent supplies photonics components, and Tower Semiconductor manufactures wafers. NVIDIA expects 70% revenue growth, and analysts note supply constraints and pricing power in these sectors.

Micron (MU) stock rose 5% before retreating to 1.8% gain. Analyst Brian Chin reiterated a buy rating and $1,500 price target. He predicts 350% sales growth to $51B and 10x earnings growth to $31.35 per share, but warns of smaller upside beats. Chin expects 15-20% chip volume growth through 2027 with higher margins.

Micron (MU), SanDisk (SNDK), and SK Hynix (SKHY) stocks rose in premarket trading due to AI demand optimism and strong semiconductor data. MU gained 2.2%, SNDK 1.4%, and SKHY 1.5%. Micron's Q4 earnings report is upcoming, while SanDisk joins the S&P 100. China's CXMT began DRAM production, but it targets mobile DRAM, not AI-focused HBM. U.S. chipmakers and South Korean exports also showed strength.