Micron’s AI-Driven Surge Prompts Staggering New Price Target

A bold new assessment from Robert W. Baird has placed Micron Technology firmly in the spotlight. On December 21, the firm's analyst, Tristan Gerra, issued a dramatic increase in his price target for the memory chip manufacturer, raising it to $443 from a previous $235. This new projection implies an upside of approximately 96% from the stock's recent trading range of $265 to $270, signaling a powerful vote of confidence in the company's ongoing trajectory.

The foundation for this optimistic outlook is Micron's formidable first-quarter earnings for fiscal 2026, reported for the period ending November 27, 2025. The company delivered results that handily surpassed market expectations, showcasing remarkable growth:

• Revenue reached $13.64 billion, a 57% year-over-year increase.
• Adjusted earnings per share came in at $4.78, beating the consensus estimate of $3.96.
• Gross margin expanded significantly to approximately 56%, an 11-percentage-point improvement.
• Operating income soared to $6.14 billion, up from $2.17 billion in the prior-year period.

Management's guidance for the current second quarter points to revenue of around $18.7 billion, with gross margins expected to climb to about 68%. This forecast underscores the firm's sustained pricing power in a supply-constrained market.

Unprecedented Demand for High-Bandwidth Memory

A central catalyst for Micron's strength is the critical shortage of High Bandwidth Memory (HBM), a key component for artificial intelligence infrastructure. The company confirmed that its entire HBM production capacity is already sold out through the end of 2026. Furthermore, binding agreements are in place for its next-generation HBM4 product. This supply-demand imbalance grants Micron considerable leverage in negotiations.

Should investors sell immediately? Or is it worth buying Micron?

Industry analysis from Counterpoint Research suggests DRAM prices could double in 2026, propelled by insatiable demand from data centers. Reflecting this trend, Micron's DRAM revenue surged 69% last quarter, which included price increases in the mid-30-percent range.

Valuation Gap Presents Opportunity

Despite the stock having tripled in value since the start of the year, Micron's price-to-earnings ratio remains at a relatively moderate 21. This stands in stark contrast to the technology sector's average P/E of 44. This discrepancy indicates that the anticipated profit growth from the AI cycle may not yet be fully reflected in the share price.

Micron is channeling this momentum into expansion, with plans to invest roughly $20 billion in capacity growth during 2026. Hyperscalers including Meta, Alphabet, and OpenAI are among the key customers in line. The analyst consensus mirrors this positive view: of 43 covering analysts, 91% maintain a Buy recommendation on the stock. Following Deutsche Bank's price target of $300 set on December 18, Baird's new assessment now stands as the most bullish on Wall Street, explicitly rating Micron as a "Top Large-Cap Idea." The firm highlights Micron's successful evolution from a traditional memory maker to an indispensable supplier for AI infrastructure, noting its leadership in product quality and technology amid double-digit demand growth for AI-optimized memory.