D.A. Davidson initiated coverage of Micron Technology with a Buy recommendation and a $1,000 price target on Monday, a projection the firm says is the highest on Wall Street. The broker's stance centers on the belief that artificial intelligence is changing the structural dynamics of the memory market in ways not yet fully reflected in current valuations.
Analyst Gil Luria lays out the thesis in a research note, arguing that AI-led compute rollouts are producing an unusually long memory cycle. He wrote:
"We believe artificial intelligence is creating a longer-than-usual memory cycle as compute deployment and demand generation exist in a positive feedback loop, creating a structurally higher ceiling for memory pricing and demand,"
The $1,000 target implies roughly 91% upside from Micron's most recent closing price of $524.56. D.A. Davidson's valuation framework applies a multiple of 10 times Micron's fiscal year 2030 earnings estimate of $139 per share, then discounts that figure back three years at 10% to reach the present target.
Luria contrasts this outlook with how past memory cycles unfolded, when capacity additions frequently overtook demand, margins tightened and the cycle reversed. He contends AI changes that pattern because new compute capacity often unlocks fresh use cases and incremental demand that did not exist before the infrastructure was in place.
Part of the supporting evidence for this view is the emergence of longer-term supply arrangements between memory suppliers and large cloud customers. Luria highlights a shift toward multi-year strategic customer agreements, noting that Micron became the first memory supplier to announce a five-year supply deal in March. He says Samsung and SK Hynix are reportedly engaged in comparable conversations with hyperscaler customers. The analyst notes this move away from single-year contracts materially improves demand visibility and pricing stability for memory vendors.
"We are not arguing that there isn’t a cycle, just that the duration and extent of the cycle may not be priced in properly,"
On the product and cost side, Luria points to Micron's process-node leadership as a compounding advantage. He credits Micron with four consecutive node leadership wins in DRAM and three in NAND, which the note characterizes as a persistent cost edge.
High-bandwidth memory, or HBM, is identified as a central growth driver for Micron. The analyst's estimates show Micron increasing its HBM market share from roughly 5% in 2024 to about 21% by the second quarter of 2025, a gain that would move Micron past Samsung to become the second-largest supplier in the HBM market.
"The market is still framing the cycle through the lens of prior downturns, which appears to underestimate the demand environment, especially relative to the rest of the semi complex,"
Luria concludes that when Micron's node advantages are combined with what he describes as a long-duration earnings power story driven by AI-led demand and multi-year contracts, the shares have meaningful upside potential.
Sectors affected: Semiconductor manufacturers, cloud infrastructure providers and enterprise compute customers are the primary sectors implicated by the analyst's thesis, given their roles in supplying, deploying and consuming memory products driven by AI workloads.