Micron Stock (MU) Rally Continues as One Analyst Sees Path to $700

Micron (NASDAQ:MU) stock extended its incredible run on Monday, climbing ~6% in the week’s opening session and bringing its gains over the past 12 months to a remarkable 557%.

The latest uptick came off the back of a new report from Melius Research analyst Ben Reitzes, who has laid out the bull case for the memory giant, saying the stock “can go up more.”

Reitzes initiated coverage of Micron with a Buy rating, backed by a $700 price target, suggesting another 33% upside from here. (To watch Reitzes’ track record, click here)

Reitzes thinks that among the market’s memory players, the company holds a unique position that is being underestimated.

“Micron is the only U.S.-based manufacturer of both DRAM and NAND at scale, and we think it is structurally advantaged within an AI infrastructure stack that is still priced like a cyclical commodity,” the analyst said.

Standing in the company’s stead is that it participates across all major memory segments. Its HBM4 is shipping one quarter earlier than planned at speeds above 11 Gbps, and the company has already sold out its entire CY26 supply. It has also entered into the industry’s first five-year strategic customer agreement (what the company has termed SCAs), moving away from the prior one-year LTA model toward defined multi-year volume and pricing commitments that better account for hyperscaler deployment timeframes. Meanwhile, in F2Q26, gross margins hit 74%, and for FQ3, the company has guided to gross margins of 81%, which would surpass even Nvidia.

Yet, Reitzes says the stock is being valued as though margins will “plunge a few thousand points from here.” However, based on the underlying fundamentals, the analyst thinks margins above 70% are likely to persist longer than consensus expects. At the same time, evolving industry dynamics, particularly the shift toward strategic long-term supply agreements, could justify a higher valuation multiple, potentially 8x+ earnings compared to roughly 5x today.

Reitzes’ $700 price target implies a valuation of just 6.5x his fiscal year 2028 EPS estimate, which sits 34% above consensus expectations. The Street is assuming EPS will decline by about 10% in 2028, driven by margin compression and pricing pressure. That seems “too draconian,” particularly given the underlying fundamentals and increasing customer adoption of SCAs.

The analyst believes there is a credible path to sustaining around $100 in EPS for several years, driven by a rising mix of HBM, improving DRAM pricing as AI demand shifts the model from per-bit to per-bandwidth, and an inflection in the NAND segment tied to ICMS-led KV cache offload demand. SanDisk estimates this could add roughly 75–100 incremental exabytes in CY27 alone, none of which is reflected in the current guide.

“We think the combination of inelastic AI demand, structurally constrained supply, multi-year contract visibility, and a product portfolio that touches every tier of the AI memory stack from G1 (HBM) through G4 (bulk storage) makes Micron the highest-conviction name in memory and one of the best risk/rewards in the AI infrastructure complex,” Reitzes further said.

So, that’s the Melius view, but what does the rest of the Street make of Micron’s prospects? 25 other analysts are also bulls, while 3 additional Holds can’t detract from a Strong Buy consensus rating. At $549.23, the average price target points toward 12-month returns of ~5%. (See Micron stock forecast)

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.