Micron stock draws aggressive target reset from 5-star analyst

Micron Technology's (MU) next earnings report has just become a bigger test for the AI trade.

Deutsche Bank analyst Melissa Weathers and her team just raised their view on the stock in a big way ahead of the company’s upcoming June 24 fiscal Q3 results.

According to TheFly, the 5-star analyst laid out the case that AI server-related memory demand could remain stronger for longer. 

At the heart of the call is the idea that high-bandwidth memory is tightening supply across the broader DRAM market, helping Micron maintain pricing power.

Over the years, Micron has traded like a deeply cyclical chip stock. 

Case in point: in fiscal 2023, revenue dropped dramatically to $15.54 billion from $30.76 billion a year earlier, while the company swung to a $5.83 billion GAAP net loss, underscoring how brutally memory downturns hit earnings. 

When memory prices rise, earnings surge. When supply catches up, margins can collapse. Deutsche Bank’s note flips the script on that old framework by suggesting AI may be potentially stretching the upcycle far beyond typical expectations.

For investors, the upcoming report has to show whether Micron’s rally is backed by durable AI demand or already pricing in too much good news.

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Wall Street price targets for Micron stock before earnings

• Susquehanna: $1,750. Susquehanna raised Micron’s target from $600, citing strong memory average selling prices and growing confidence that margin strength can last.
• UBS: $1,625. UBS analyst Timothy Arcuri lifted Micron’s target from $535, arguing AI demand and long-term supply agreements are structurally changing the memory market.
• TD Cowen: $1,500.TD Cowen analyst Krish Sankar raised the target from $660, pointing to higher DRAM content in AI systems, agentic AI demand, and a possible $150 EPS setup for 2027.
• Cantor Fitzgerald: $1,500. Cantor Fitzgerald lifted Micron’s target from $700 and kept an Overweight rating, backing the view that the AI memory upcycle still has room to run.
• Citi: $1,200. Citi raised Micron’s target from $840 and kept a Buy rating, citing better-than-expected memory prices, elevated gross margins, and tight DRAM supply around AI platforms

What Deutsche Bank sees in Micron before earnings 

Deutsche Bank sees Micron’s earnings setup as much bigger than a routine memory-chip rebound.

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Analyst Melissa Weathers raised the firm’s price target on Micron Technology to $1,500 from $1,000 and kept a Buy rating ahead of the company’s Q3 report on June 24. 

Based on Micron’s recent price near $1,043, that target implies roughly 44% upside.

Her team’s arguments are based on basic supply and demand. 

Deutsche Bank argues that AI-driven memory demand is still running ahead of supply, especially in DRAM and high-bandwidth memory, or HBM. The firm sees that imbalance lasting well into 2028 and potentially longer, rather than fading quickly as in a normal memory cycle.

HBM is used in AI accelerators and consumes more wafer capacity, and robust HBM demand can, therefore, tighten supply across the broader DRAM market, supporting pricing and margins.

That said, the earnings assumptions are aggressive. 

Deutsche Bank reportedly sees Micron earning about $160 per share in 2027, with gross margins staying above 80%. 

For context, Deutsche Bank analyst Melissa Weathers is ranked among the most prolific Wall Street analysts on TipRanks, with an 82% overall success rate and a 103% average return per rating.

Her Micron ratings stand out because her past Micron calls show a 100% success rate across 10 ratings.

That would make the stock look less expensive even after its sharp rally. Following its momentous rally over the past year, the stock trades at 48 times trailing 12-month non-GAAP earnings, according to Seeking Alpha.

Why the earnings bar is rising for Micron stock 

Micron set a high bar for fiscal Q3 in its previous earnings report.

After posting fiscal Q2 revenue of $23.86 billion and non-GAAP EPS of $12.20, management guided for Q3 revenue of $33.5 billion, plus or minus $750 million. 

It also projected non-GAAP gross margin of about 81% and non-GAAP EPS of $19.15, plus or minus $0.40.

CEO Sanjay Mehrotra said Micron expected “significant records again” in Q3, citing strong demand, tight industry supply, and the growing importance of memory in the AI era. 

“Our fiscal Q3 single-quarter revenue guidance exceeds the full year revenue for every year in our company’s history through fiscal 2024."

Wall Street is broadly in line, with some estimates slightly higher. Recent previews indicate Q3 revenue of $33.7 billion to $34.0 billion and EPS of $19.2 to $19.4.

The year-over-year comparison is dramatic because Micron delivered $9.30 billion in revenue and $1.91 in non-GAAP EPS in Q3 last year.

What Deutsche Bank’s call means for investors

Deutsche Bank’s Micron call comes at a point when the market investors are still looking to pay for AI earnings but less willing to forgive misses.

The Fed held rates steady at 3.50% to 3.75% yesterday, and sticky inflation keeps the higher-for-longer pressure in place.

That makes valuation more critical for high-growth tech and AI names. Therefore, Micron’s bull case has to be backed by real earnings power, not just AI enthusiasm.

The checklist is clear. 

Micron needs to show that AI memory demand is still outpacing supply, that HBM strength is tightening broader DRAM pricing, and that gross margins can stay near the unusually high levels management guided for Q3. 

Strong revenue guidance for the next quarter would help confirm Deutsche Bank’s view that this cycle can stretch into 2028.

The bearish case would strengthen if customers signal inventory digestion, AI capex slows, yields stay elevated, or margin guidance peaks. 

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