Shares of Micron Technology (MU +0.90%) climbed to record highs on Tuesday, following bullish analyst remarks.
Image source: The Motley Fool.
AI needs enormous amounts of memory
The booming demand for artificial intelligence (AI)-powered applications has created a shortage of ultra-fast memory chips required to process the massive amounts of data needed for AI model training and inference.
These shortages are enabling memory chipmakers like Micron to hike prices, helping to drive their profit margins sharply higher. Micron's revenue nearly tripled year over year to $24 billion in the quarter ended Feb. 26, while its adjusted net income soared almost eightfold to $14 billion.
NASDAQ: MU
Key Data Points
Researchers at Swiss multinational investment bank UBS see the good times continuing for Micron. Analyst Timothy Arcuri believes that shortages of random-access memory will persist until at least the second quarter of 2028.
In turn, Arcuri expects Micron to lock-in attractive prices for its chips under long-term supply agreements with its customers for up to five years. He thinks this will help to lessen the company's typical earnings volatility and enable Micron to generate more than $100 per share in profits annually from 2027 to 2029.
All told, Arcuri sees Micron's stock price climbing another 80% to $1,625 per share.
This growth story is far from finished
Micron's shares are already up a whopping 184% so far in 2026 and a staggering 830% over the past year. Yet with powerful AI-driven demand trends firmly in its favor, this top memory producer should continue to hit new highs in the years ahead.
