Why Micron Stock Could Soar 35% on AI Memory DemandWritten by Thomas Hughes. Published 10/21/2025.
Key Points- Micron's HBM3E memory is vital to AI and is about to see unprecedented demand.
- Undersupply and demand growth will underpin margin expansion and earnings power.
- Analysts and institutions provide solid support in 2025, and the trends are bullish and strong.
The rally in Micron (NASDAQ: MU) has likely only just begun. Hundreds of billions of dollars' worth of datacenter-related business tied to NVIDIA (NASDAQ: NVDA), Advanced Micro Devices (NASDAQ: AMD), and Oracle (NASDAQ: ORCL) has not yet been fully reflected in Micron's results or guidance.
The deal between OpenAI and AMD alone suggests a substantial ramp for Micron, and strong demand is visible across the AI ecosystem.
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The key point: AI requires memory—specifically HBM3E, which Micron supplies—and demand is so large that it will likely be years before the market is satisfied. In the meantime, Micron looks poised for a game-changing boost to revenue and earnings that analysts are beginning to emphasize ( see analysis).
October Upgrades Drive Micron to New HighsMicron stock climbed to a fresh all-time high in late September after its fiscal Q2 release and continued to rally in October amid heavy analyst activity.
MarketBeat’s data shows 11 reports issued in the first two weeks of October, including initiated coverage, three upgrades to Overweight/Outperform equivalents, and a slew of price-target increases.
Analyst commentary ( see consensus) repeatedly references DRAM (critical to AI and including HBM3E). Citigroup calls the demand “unprecedented.” Their view, echoed by others, is that demand combined with structural undersupply creates a favorable pricing environment that should boost margins and earnings leverage.
Morgan Stanley notes that investors concerned about valuation should consider several quarters of sustained double-digit growth ahead. At roughly 12x earnings as of late October, Micron’s valuation could fall to about 10x by 2039 under that scenario; using Citigroup’s peak EPS target of $26 would imply a multiple near 7.5x.
That outlook translates to the potential for the stock to rise 30% or more over that period, consistent with analysts' forecasts. More than half of October price targets sit in the $245–$250 range or higher, with a new high target of $270 implying roughly 35% upside—likely a conservative target in hindsight for some analysts.
NVIDIA and China Are Risks—but Not RoadblocksRisks for Micron include NVIDIA choosing Samsung’s HBM3E technology and Micron’s decision to exit certain China-based server businesses. While Samsung winning some NVIDIA business is concerning, it doesn't derail Micron’s outlook—NVIDIA expanding its supply chain simply reflects a market where demand outstrips supply by roughly 10-to-1.
In this environment, NVIDIA and AMD are likely to continue using as much HBM memory as Micron can produce, and Micron's capacity is expected to increase.
Micron’s exit from parts of its China server business is mainly a response to the 2023 drop in server demand after U.S. export restrictions. Reducing exposure to that underperforming segment lets Micron focus on stronger businesses and other markets in China.
Micron will continue serving automotive and mobile markets and will still supply companies such as Lenovo Group (OTCMKTS: LNVGY), which have substantial operations outside their home country.
Micron’s Stock Price Is in a Secular UpswingDaily and weekly charts suggest the market could peak and pull back before the late-December earnings release, which is a normal possibility. However, the monthly chart shows Micron is in a secular upswing, so any near-term pullbacks are likely buying opportunities.
Technical signs of strength—convergent MACD and elevated trading volume—indicate upward momentum despite short-term swings. Since the MU market already reached the base-case target implied by the September breakout, the bull-case target is now in play.
That bull-case target roughly equals the percentage increase from the bottom to the top of the trading range prior to the breakout—about 80%—which aligns with analysts' higher-end scenarios. |
