Micron Technology delivered a blockbuster first-quarter earnings report that sent shockwaves through Wall Street and provided much-needed reassurance about the strength of AI infrastructure demand. The chipmaker’s results exceeded analyst expectations on both earnings per share and revenue, with stock surging as much as 14% following the announcement.
Morgan Stanley analysts hailed the performance as potentially “the best revenue/$net income upside in the history of the US semis industry” outside of NVIDIA, reiterating Micron as a top pick and raising their price target to $350, implying 38% upside. The enthusiasm was widespread across Wall Street, with Bank of America upgrading Micron from Neutral to Buy and raising earnings estimates by 62-80% for fiscal years 2026-2028, setting a new price target of $300.
The most compelling aspect of Micron’s report was the 69% surge in revenue from dynamic random access memory (DRAM) chips, which are critical components in AI servers. This dramatic growth directly addresses recent market concerns about whether AI demand is sustainable, following disappointing performances from companies like Oracle and CoreWeave that had raised questions about excess in the AI infrastructure buildout.
Mizuho Americas analyst Vijay Rakesh noted that DRAM chip prices are essentially doubling since the previous quarter, raising his price target from $270 to $290. BNP Paribas analyst Karl Ackerman highlighted that Micron expects industry DRAM and NAND demand to both grow approximately 20% year-over-year for calendar year 2026, with the company planning to increase bit supply by the same percentage.
Paul Meeks from Freedom Capital Markets took a contrarian but optimistic stance, predicting that “the AI infrastructure build-out continues for at least another year, likely two,” suggesting a $300 price target is achievable and could go even higher with annualized earnings estimates around $34 per share.
Micron’s performance caps an extraordinary year for the company, with stock up almost 200% year-to-date, substantially outpacing larger rivals like NVIDIA (28%) and AMD (65%). This remarkable performance demonstrates that opportunities in the AI chip sector extend well beyond the most prominent names.
Key Quotes
Outside of NVIDIA this was likely the best revenue/$net income upside in the history of the US semis, industry
Morgan Stanley analysts made this striking assessment of Micron’s quarterly performance, placing it among the most impressive semiconductor earnings beats ever recorded and reinforcing their recommendation of Micron as a top stock pick with a $350 price target.
We are raising our FY26/27/28 pf-EPS by 62%/80%/42%, translating into CY26/27E pf-EPS at $37.25/$37.00, also up over 70% from prior forecast and upgrade to Buy from Neutral
Bank of America’s dramatic upward revision of earnings estimates and upgrade from Neutral to Buy demonstrates how significantly Micron’s results exceeded expectations, with the bank raising its price target to $300 based on stronger memory demand driven by AI applications.
I’m somewhat contrarian here, but I believe the AI infrastructure build-out continues for at least another year, likely two. That suggests upside to earnings estimates, which are already annualized at about $34 per share
Paul Meeks, managing director at Freedom Capital Markets, offered this optimistic long-term view that counters recent market pessimism about AI investment sustainability, predicting Micron could reach $300 or higher as the infrastructure buildout continues.
For CY26, Micron expects industry DRAM and NAND demand to both grow ~20% Y/Y. On the supply side, Micron expects to increase their bit supply for DRAM and NAND by 20%
BNP Paribas analyst Karl Ackerman highlighted Micron’s forward guidance showing balanced growth expectations across both major memory chip categories, indicating sustained demand across the AI infrastructure ecosystem rather than isolated strength in one product line.
Our Take
Micron’s earnings represent a pivotal moment for AI market sentiment. While much attention focuses on GPU manufacturers and AI software companies, memory chips are the unsung heroes enabling AI systems to function at scale. The 69% DRAM revenue surge and doubling prices reveal genuine supply-demand imbalances driven by real AI deployment, not speculative hype. What’s particularly significant is Micron’s 200% year-to-date performance outpacing NVIDIA—suggesting investors are recognizing that AI value creation extends throughout the semiconductor stack. The company’s guidance for 20% industry growth in both DRAM and NAND through 2026 provides a concrete roadmap for sustained AI infrastructure investment. This earnings beat may mark the moment when markets shifted from questioning AI sustainability to recognizing we’re still in the early innings of a multi-year buildout cycle.
Why This Matters
Micron’s earnings report represents a critical validation of sustained AI infrastructure investment at a time when market sentiment had turned cautious. After weeks of AI-driven market volatility and concerns about overinvestment, Micron’s 69% DRAM revenue surge provides concrete evidence that demand for AI-enabling hardware remains robust and growing.
This matters because memory chips are essential bottlenecks in AI systems—without sufficient high-performance DRAM and NAND flash memory, even the most powerful AI processors cannot operate efficiently. The doubling of DRAM prices and 20% projected growth in both DRAM and NAND demand signals that the AI infrastructure buildout is far from complete.
For businesses and investors, Micron’s success demonstrates that AI opportunities extend beyond obvious players like NVIDIA. The semiconductor supply chain supporting AI is broad and deep, with memory manufacturers playing an indispensable role. This could reshape investment strategies and validate continued capital expenditure in AI infrastructure across the technology sector, potentially sustaining the broader AI boom for another 1-2 years.