Micron (MU) Draws Outperform Initiation on AI Memory Tailwinds

Micron Technology, Inc. (NASDAQ:MU) is one of the AI Stocks Analysts Are Watching. On January 22, William Blair analyst Sebastien Naji initiated coverage on the stock with an “Outperform” rating. The firm sees Micron well-positioned to deliver sharp profit growth amid AI-fueled memory bottlenecks.

According to William Blair, the AI-driven memory boom is sustainable, at least for the next couple of years.

While valuation increasingly embeds significant growth expectations, we believe shares can continue to work on the back of a multiyear, AI-driven product cycle characterized by tight supply. We estimate a fair value for shares of roughly $450.

The firm believes that a multiyear memory upcycle will lift pricing and margins, particularly by HBM (high-bandwidth memory). Customers have been pursuing higher-performance products with higher average selling prices, particularly because memory has become a bottleneck in AI systems.

The firm anticipates Micron to grow its HBM revenue 164% in fiscal 2026 and 40% in fiscal 2027, being the number two player in the market. Since HBM chips cost more and have better margins than Micron’s other products, its sales are likely to result in a 275% rise in adjusted EPS over the next two years, it noted.

William Blair forecasts MU to report an adjusted earnings of $41.77 a share in fiscal 2027, up from $8.29 in fiscal 2025.

Memory Supercycle Driving Record Profitability. Micron has been a U.S. semiconductor stalwart serving as one of the three major global memory suppliers (alongside Samsung and SK Hynix). Access to memory has become a key bottleneck in AI racks/systems, increasing demand for more performant, higher bandwidth memory solutions. Against a backdrop of limited supply that is likely to remain in place into 2027, Micron is poised to benefit from significant ASP growth and higher margin products. We expect the company to grow non-GAAP EPS over 275% over the next two years.

Micron Technology, Inc. (NASDAQ:MU) develops and sells memory and storage products for data centers, mobile devices, and various industries worldwide.

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