Why Micron Stock Popped Again on Monday

Micron (NASDAQ: MU) stock continues to outperform Monday after its big Friday bounceback.

Last week, Mizuho raised its price target on Micron stock, citing tight DRAM computer memory supplies that could push gross profit margins higher. This morning, several more analysts chimed in with words of support for the buy thesis.

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Why Wall Street loves Micron

Micron is due to report fiscal Q1 2026 earnings on Dec. 17. Last week, Mizuho said DRAM prices are spiking, and demand for NAND high-bandwidth memory (HBM) is on the rise, as artificial intelligence companies buy heavily to support their AI functionality. Mizuho may have been among the first to note this trend, but it isn't the only one.

This morning, UBS analyst Timothy Arcuri reiterated his buy rating and $275 price target on Micron stock, predicting an earnings beat as "tightening supply" of DRAM prices leads to "DDR gross margin surpassing HBM for the first time in early C2026."

Susquehanna Bank and Bernstein SocGen raised their price targets to $270 and $300 a share, respectively. And Bank of America analyst Vivek Arya thinks this could be more than just a one-beat story. Arya says "the current AI upcycle could be more structural in nature and sustainable." (BofA values Micron stock at $250, though).

Why buy Micron stock?

Of particular note, BofA's Arya points out that AI functions require much more memory to be implanted in servers than usual -- as much as two times more memory in general, and three times more DRAM (and DRAM is Micron's specialty).

The analyst argues this could lead to "even greater (>3x) ... total gross profit" for Micron per server loaded with its DRAM. If that's true, even analyst forecasts for 29% long-term earnings growth at Micron could turn out to be conservative.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.