RBC Capital Markets Raises Micron Price Target to $525 Amid AI-Driven Memory Demand

RBC Capital Markets has raised its price target for Micron Technology to $525 from $425, reflecting a 23% potential upside. Analyst Srini Pajjuri highlighted the company's robust pricing strength in memory chips, anticipating continued demand from artificial intelligence and data centers through 2028. Pajjuri noted that data centers now account for over half of the DRAM industry's revenue and expects strong AI demand for high-bandwidth memory (HBM) and double data rate (DDR) to persist through 2027. He also mentioned that Micron's management indicated HBM is sold out for 2026, with HBM4 on track for volume shipments in the first quarter. Additionally, Pajjuri observed that HBM content has increased significantly with each new generation of AI processors, and DDR content in AI servers is also rising due to inferencing workloads and longer contexts. He expects any demand reduction in PC and smartphone markets to be offset by AI and data center demand. Furthermore, NAND is benefiting from retrieval-augmented generation and AgenticAI applications, with demand projected to outpace supply through 2026. Overall, Pajjuri anticipates that memory demand will continue to exceed supply growth through 2026 and into the following year. He believes Micron could maintain its current share in the HBM market, which grew from zero to over 20% in approximately eight quarters. This target increase follows Micron's announcement of plans to build a second manufacturing plant in Taiwan to enhance its DRAM production. Micron's shares have surged 49% this year and nearly 323% over the past 12 months.