Wall Street analysts revised price targets for memory chipmakers Micron Technology and Applied Materials on Wednesday to reflect bullish outlooks amid an ongoing supply crunch driven by artificial intelligence infrastructure buildout. Both stocks rose just under 3% in premarket trading at the time of reporting. The revisions come as analysts cite elevated gross margins, high memory prices, and strengthening demand for chip equipment as key drivers for the sector.
Citi and Deutsche Bank Raise Micron Price Targets
Ahead of Micron's fiscal third-quarter results, Citi and Deutsche Bank issued commentary on the company while maintaining their 'Buy' rating on the stock.
According to TheFly, Citi is expecting Micron to benefit from "elevated" gross margins, coupled with high memory prices this year. A recent report that chip giant Nvidia de-spec'd DRAM in its Vera Rubin platform was also among the reasons the firm increased its stock multiple on the company. The firm raised its price target from $840 to $1,200, implying about 18% upside potential as of the stock's last close on Tuesday.
Deutsche Bank revised its price target to $1,500 from $1,000, implying a 47% upside potential. "We see continued momentum for MU fundamentals into this earnings report, with the industry supply-demand imbalance sustaining (if not worsening) into 2H26, 2027, and well into 2028," Deutsche Bank analyst Melissa Weathers reportedly said in a note that CNBC saw. The bank projects that memory-related tailwinds will boost revenue to $35.1 billion, exceeding Micron's own estimate of $33.5 billion.
Koyfin has polled adjusted earnings per share of $19.72 on revenue of $34.5 billion for Micron's third quarter. 39 out of 44 analysts rate the stock a 'Buy' or higher, 4 rate it a 'Hold,' and 1 'Sell.'
Citi and Morningstar Analysts Increase Applied Materials Outlook
Citi analyst Atif Malik raised the price target on chip equipment maker Applied Materials to $710 from $550, implying 25% upside potential, and is bullish on the company benefiting from demand for NAND memory equipment. Malik believes the "widening gap" between needed DRAM and available supply will drive adoption of complementary solutions, TheFly reported.
In a recently published note, Morningstar analyst William Kerwin said the artificial intelligence-driven growth cycle for chip equipment is strengthening, benefiting Applied Materials, and that he now expects "even stronger growth through 2028." "We see Applied as very well-positioned for leading-edge logic, DRAM, and advanced packaging supply buildouts," Kerwin said in a note to clients. "We expect Applied Materials to grow at a mid- to high-single-digit pace over the course of market cycles as it benefits from trends toward more complex chips in the long term, including gate-all-around transistors, advanced packaging, and artificial intelligence."
Retail Sentiment Turns Bearish on Micron, Neutral on Applied Materials
On Stocktwits, retail sentiment about the Micron stock remained in 'bearish' territory, while it turned 'neutral' from 'bullish' on Applied Materials over the last 24 hours. Micron stock has risen more than eightfold, while Applied Materials has more than tripled in value over the last 12 months, outperforming the S&P 500 and the popular memory-chip-tracking ETF, Roundhill Memory ETF.
FAQ
What price targets did analysts set for Micron Technology?
Citi raised its price target for Micron from $840 to $1,200, implying about 18% upside potential as of the stock's last close on Tuesday. Deutsche Bank revised its price target to $1,500 from $1,000, implying a 47% upside potential.
Why did analysts raise price targets for Applied Materials?
Citi analyst Atif Malik raised the price target on Applied Materials to $710 from $550, citing bullish demand for NAND memory equipment and a widening gap between needed DRAM and available supply. Morningstar analyst William Kerwin said the artificial intelligence-driven growth cycle for chip equipment is strengthening, benefiting Applied Materials.
What are the earnings expectations for Micron's third quarter?
Koyfin has polled adjusted earnings per share of $19.72 on revenue of $34.5 billion for Micron's third quarter. Deutsche Bank projects revenue of $35.1 billion, exceeding Micron's own estimate of $33.5 billion.
