Shares of Micron Technology Inc (NASDAQ:MU) were up 13.5% on Thursday following the memory chip maker’s better-than-expected first-quarter results and upbeat guidance for 2026.
Micron reported revenue of $13.64 billion for Q1’26, surpassing analysts’ estimates of $12.95 billion. Adjusted earnings per share came in at $4.78, well above the $3.95 expected.
Analysts said the results highlighted a robust memory cycle, particularly driven by data center demand and artificial intelligence (AI) applications.
Bank of America upgraded Micron to “Buy” from “Neutral,” citing a potential $40-plus EPS this cycle—four times its prior peak—and raised its price target to $300 from $250. The firm highlighted the company’s growing exposure to data center memory, multi-year customer agreements, and strong free cash flow, which could support a resumption of share buybacks by the fourth quarter of 2026.
“Micron’s Cloud Memory unit doubled year-on-year, with DC NAND exceeding $1 billion in quarterly sales, while LPDRAM and HBM continue to ramp across AI servers,” Bank of America wrote.
The bank also noted that Micron’s free cash flow is expected to expand toward $6–8 billion by the end of 2026.
Wedbush also expressed optimism, maintaining an “Outperform” rating and raising its price target to $320. The firm pointed to Micron’s guidance for record margins, with FQ2 expected at 68%, surpassing previous historic highs.
Analysts cautioned, however, that risks remain, including potential volatility in AI demand, high spot memory prices, and industry capital expenditure increases projected at more than 30% year-on-year in 2026.
Despite these risks, Micron’s management expects tight memory supply to persist through 2026, with the company only able to fulfill a fraction of customer demand, supporting favorable pricing conditions for DRAM and NAND products.