Micron (MU) stock has gained 28% year-to-date despite broader market pressures and fears that Alphabet-owned Google’s (GOOGL) new compression method, TurboQuant, could impact memory demand. The stock has rallied more than 310% over the past year as the company benefits from strong AI-led demand for memory and higher pricing amid a supply crunch. While an analyst from Erste Group downgraded his rating for Micron stock, most analysts remain bullish and see continued upside.
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Top RBC Analyst Expects Continued Pricing Strength
Recently, RBC Capital analyst Srini Pajjuri reiterated a Buy rating on Micron stock with a price target of $525. The analyst expects strength in memory pricing to extend into 2027 amid supply constraints. Following his meetings with more than 15 tech supply chain companies in Asia, the 5-star analyst noted that AI and data center component demand remains strong, with no signs of a slowdown.
Pajjuri expects tight supply conditions to continue through the year, driving prices higher in many cases. Furthermore, he noted that limited cleanroom space remains the major hurdle for memory and 3nm chip supply, and could continue next year, with EUV (Extreme Ultraviolet) lithography machines emerging as the next potential headwind. Pajjuri sees a continued rise in DRAM (dynamic random access memory) pricing, given persistent cleanroom constraints that are unlikely to ease significantly until the second half of 2027.
Additionally, Pajjuri noted that data centers are expected to account for more than 70% of the DRAM market in 2026, so any decline in demand from PCs and smartphones should not materially impact pricing.
Erste Analyst Moves to the Sidelines
Erste Group analyst Hans Engel downgraded Micron Technology stock to Hold from Buy. The 4-star analyst noted that the company issued a very high top-line outlook of $109 billion for Fiscal 2026 to reflect the robust demand for memory, particularly for HBM3E. He added that Micron’s rapidly growing HBM (high bandwidth memory) segment is already sold out for this year.
Consequently, Engel noted that high investment is required to increase production, thereby reducing free cash flow. Moreover, there are concerns about the long-term sustainability of the memory cycle. Engel also highlighted that the DRAM division is Micron’s largest segment, but is growing more slowly, and the price trend has cooled recently.
Is MU a Good Stock to Buy Now?
While Erste analyst has moved to the sidelines on Micron stock, most analysts remain bullish. Overall, 26 out of 29 analysts have a Buy rating on Micron stock, while the remaining three have a Hold recommendation. The average MU stock price target of $533.53 indicates about 46% upside potential.
