Micron (MU) Stock Surges as Wall Street Sees Something Different This Cycle

TLDR

• NewStreet Research upgraded Micron stock to Buy and set a $1,250 price target.
• Micron shares closed at $949.83 after gaining 4% in the previous session.
• NewStreet expects Micron to generate more than $150 billion in annual free cash flow by 2030.
• Micron reported $41.5 billion in quarterly revenue, up 346% from a year earlier.
• The company has signed 16 long-term customer agreements covering major portions of DRAM and NAND supply through 2030.
• AI demand remains a key growth driver, with NewStreet expecting it to represent about two-thirds of Micron’s business mix.

Micron (MU) stock received fresh support from NewStreet Research after the firm upgraded the memory chip maker to Buy, following its latest review. Analyst Pierre Ferragu set a $1,250 price target after shares closed Thursday at $949.83, up 4%.

Micron Technology, Inc., MU

NewStreet said Micron may be moving away from the sharp boom-and-bust cycles that have shaped the memory market. The firm pointed to stronger earnings visibility, rising AI demand, and long-term customer agreements.

Micron stock upgrade points to structural shift

Ferragu noted that Micron stock has risen more than tenfold from its April 2025 lows. During the same period, production costs rose by about 25%, creating a gap NewStreet said had not appeared in earlier memory cycles.

The research firm began studying the current cycle in July. Its latest work projects more than $600 billion in cash by 2030 and annual free cash flow above $150 billion at the expected peak.

Micron recently reported quarterly revenue of $41.5 billion. Revenue rose 74% from the prior quarter and 346% from a year earlier, marking the company’s fifth straight quarterly revenue record.

Gross margin reached 84.9%, more than twice the level reported a year earlier. CEO Sanjay Mehrotra said data center revenue exceeded $25 billion, putting the business above a $100 billion annualized run rate.

Customer agreements support earnings visibility

Micron has signed 16 strategic customer agreements across data center, consumer, and automotive markets. The deals cover about 20% of DRAM volume and one-third of NAND volume through 2030.

Management said the agreements include floor prices that would keep gross margins above previous cycle peaks. NewStreet expects these contracts to reduce exposure to sharp price swings and support more stable revenue.

The firm also expects AI to account for about two-thirds of Micron’s business mix. It projects 15% annual growth beyond 2030, compared with a 20-year average for the memory industry near 10%.

NewStreet sees high-bandwidth memory as a key driver of that growth, as demand from AI systems remains strong. The firm also expects this segment to carry a higher valuation than standard commodity DRAM.

Micron has guided for record fiscal fourth-quarter revenue of $50 billion and record earnings of $31 per share. Those targets, combined with contracted demand and AI-related memory sales, remain central to NewStreet’s positive view of Micron stock.

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