Micron Technology's stock jumped about 6.8% in premarket trading on Tuesday, July 21, following a surge in optimism fueled by strong AI-related memory demand and positive analyst insights.

Analyst Upgrades and Market Response

Morgan Stanley analyst Joseph Moore identified recent memory stock declines as buying opportunities and forecasted a 25% increase in third-quarter memory prices compared to the second quarter, citing tightening supply at data centers. KeyBanc raised Micron's price target to $1,750 while reaffirming an Overweight rating. Bank of America included Micron in its high-conviction US-1 list. The average price target from 50 analysts is $1,548.86, reflecting a broad Buy consensus.

UBS projected a 50% to 60% rise in overall memory demand next year, with AI-specific demand potentially doubling. UBS also noted that Micron might repurchase over 40% of its stock by 2028 once buyback restrictions lift in late 2026.

Industry Impact and Supply Constraints

SK Hynix shares also climbed, with ADRs up 7.2% premarket and local shares rising 4.1%. The company’s chairman described AI memory prices as abnormally high, signaling strong pricing power in the sector.

Micron reported full bookings for High Bandwidth Memory (HBM) production through 2026 and 2027. HBM is essential for AI training and inference, making supply tight and prices firm. The upcoming tech earnings season, starting with Alphabet, may reveal increased AI capital expenditures by major cloud players, translating into higher memory chip orders.

UBS equities head Ulrike Hoffmann-Burchardi expects AI agents to drive more than 90% of AI activity by 2030, escalating compute demands substantially. She described the recent pullback in chip stocks as a purchase opportunity.

Potential Risks

Google is reportedly developing a new chip embedding AI model elements directly into silicon, which could reduce reliance on high-bandwidth memory and data transfers. Deployment is targeted for 2028. Despite this, J.P. Morgan analyst Mixo Das dismissed concerns about weakening memory demand.

The material is for informational purposes only and does not constitute financial advice.