Micron (MU) Stock: Memory Chip Shortages Fuel Analyst Optimism and Higher Targets

TLDR

Table of Contents

Morgan Stanley lifts Micron price target to $338, citing worsening memory chip shortages
Micron and Sandisk stocks surge 7.7% and 13% respectively on upgrade news
Dell’s 150% jump in AI server orders reveals severe memory supply constraints
Memory prices climbing across DRAM, NAND, and HBM products
Analyst forecasts multiple quarters of earnings upgrades for chipmakers

Micron Technology shares rallied Monday after Morgan Stanley boosted its price target. Analyst Joseph Moore raised his target to $338 from $325 while maintaining an Overweight rating.

Micron Technology, Inc., MU

Moore also upgraded Sandisk to $273 from $263. Both stocks posted strong gains in early trading.

The analyst says recent stock weakness doesn’t reflect market reality. Memory chip shortages are getting worse across all product categories.

“The industry collectively does not have enough memory,” Moore stated. He expects several quarters of upward earnings revisions ahead.

Micron produces DRAM chips for computers and servers. The company also makes flash memory for smartphones and storage devices. It has become a leading supplier of high-bandwidth memory for AI applications.

Dell Earnings Expose Supply Crisis

Dell’s latest quarterly results confirm the shortage. The company reported AI server orders jumped 150% to $30 billion in fiscal 2026.

CFO David Kennedy pointed to memory capacity constraints during the earnings call. He confirmed prices are rising as demand outstrips supply.

Morgan Stanley projects Dell’s AI server shipments will climb another 50% in fiscal 2027. That would push revenue to $37 billion.

Dell Vice Chairman Jeffrey Clark called the situation unprecedented. He noted cost increases are happening faster than anything the company has seen before.

The problem affects both DRAM and NAND memory types. “Demand is way ahead of supply,” Clark explained.

AI Boom Fuels Memory Demand

The memory shortage stems from rapid AI infrastructure expansion. Companies are racing to build data centers for AI training and inference.

Moore doesn’t expect relief anytime soon. New chip production capacity takes quarters to come online.

This supply-demand imbalance should support higher memory prices. Better pricing translates directly to improved earnings for chipmakers.

Dell isn’t the only server maker facing constraints. The entire industry needs more memory to meet customer orders.

Morgan Stanley’s Erik Woodring says Dell clearly explained the memory supercycle dynamics. Every product category will face memory cost inflation.

Micron’s position across multiple memory markets puts it at the center of this trend. The company supplies DRAM, flash, and HBM products.

Strong AI demand will keep supply tight for the foreseeable future. Moore believes this supports his bullish outlook on memory stocks.

Sandisk should benefit from similar trends in flash memory. Both companies are positioned for multiple earnings beats as prices rise.

The analyst views the recent pullback as a buying opportunity. Tightening supply conditions point to stronger financial performance ahead for memory chipmakers.

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