Key insights
- Morgan Stanley significantly raised price targets for Micron and SanDisk, citing persistent memory supply shortages driven by AI infrastructure demand. Analyst Joseph Moore expects constraints to last 2-3 years, with DRAM being a key bottleneck. Elevated pricing and potential multiple expansion suggest further upside for these semiconductor stocks, with catalysts like HBM contract renegotiations and buybacks on the horizon for Micron.
Investing.com -- Morgan Stanley sharply raised its price targets on Micron Technology and SanDisk Corporation, more than doubling its Micron target to $1,050 from $520 and lifting SanDisk to $1,750 from $1,100, as the firm said demand continues to outpace supply across memory markets with no near-term relief in sight.
Analyst Joseph Moore told investors in a note that DRAM has become the principal bottleneck in the AI infrastructure buildout, with hyperscalers showing continued willingness to pay elevated prices.
"There's no quick fix to the memory shortage," Moore wrote, adding that supply constraints could persist for two to three more years or longer.
Morgan Stanley raised its CY26 and CY27 EPS estimates for Micron by 4% and 48%, respectively, driven by higher pricing assumptions. The firm now models DRAM pricing up 40% in the May quarter and 15% in August.
For SanDisk, CY26 and CY27 EPS estimates were lifted by 12% and 24%.
Despite strong performance from both stocks, Moore said further upside remains. Both Micron and SanDisk trade below 10x forward price-to-earnings on CY27 estimates, leaving room for multiple expansion.
"We don't think the run of strong performance is over," Moore wrote.
Morgan Stanley flagged upcoming catalysts for Micron, including HBM contract renegotiations in late 2026 and the commencement of share buybacks in FY27, where the firm models $50 billion in repurchases across FY27-28. Micron has been largely restricted from buybacks due to CHIPS Act provisions.
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