Investing.com — DA Davidson analyst Gil Luria raised his price target on Micron stock from $2,100 to $3,000, the highest on Wall Street, arguing that the broader market has fundamentally underestimated Micron’s multi-year growth as artificial intelligence reshapes memory demand. Micron stock is up about 1,500% since April of last year.
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The call, from DA Davidson analyst Gil Luria, is based on a 19x market multiple applied to the company’s FY27 EPS estimate, according to DA Davidson’s research note.
Luria’s central thesis is simple: AI infrastructure requires much more memory than previous technology cycles, supply can’t keep pace, and investors have yet to assess what this imbalance means for Micron over the next three to five years.
“We have concluded that investors are at the beginning of their journey to understanding the value of MU and believe this journey will lead them to assign a much higher multiple,” Luria wrote, following investor meetings with Micron’s senior investor relations executives, including Samir Patodia and Jeff Grattan.
The request logic presented by Luria is based on how AI models actually consume memory.
“Memory is a lever for better AI performance. AI models generate better results with more memory, run faster with more memory, and have longer pop-ups with more memory,” he wrote.
DA Davidson sees this as a structural change rather than a cyclical rise, with the company saying demand will outstrip supply in 2027 and 2028, a view that Micron itself validated in its latest earnings report, in which the company pointed to volume gains and price gains through 2028.
One of the note’s more counterintuitive arguments concerns the trend toward memory “de-specification” by customers such as Nvidia, which some investors have interpreted as a bearish signal. Luria rejects this interpretation.
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Using an automotive analogy, he wrote: “If Tesla thought it would sell 1 million cars with a 100 kW battery at $50,000 and ordered 100 MW of battery only to find it could sell 2 million cars because demand was growing, it would sell 2 million cars with a 50 kW battery at $40,000 and make more money.” »
Under Luria, customers reducing memory specifications per unit to move more products actually creates pent-up demand, as performance degradation pushes them to purchase more memory in future product cycles.
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