Bank of America reiterated its Buy rating on Micron Technology with a $1,550 price objective, implying 86.9 percent upside. The bank argues that even in a bear-case scenario with DRAM and NAND prices falling 30 to 40 percent, Micron could earn close to $100 per share — more than eight times the 2018 cycle peak.
Micron shares surged more than 8 percent Tuesday after Bank of America reiterated its Buy rating on the memory-chip maker, calling the recent semiconductor selloff an "enhanced buying opportunity."
"Memory prices and margins will inevitably normalize at some point," Vivek Arya, semiconductor analyst at Bank of America, said. "Even if we assume a bear case scenario where DRAM/NAND ASPs decline -30%/-40%, we believe potential EPS to remain near $100 — well above prior-cycle peak of ~$12 in 2018."
BofA reiterated its Buy rating and $1,550 price objective, implying 86.9 percent upside from Micron's Aug. 3 close of $829.50. The bank's base case assumes DRAM prices decline 10 percent in calendar 2028 and NAND prices fall 18 percent, yielding earnings of roughly $150 per share. Micron shares plunged 28.7 percent in July, the worst monthly performance since June 2015, after surging more than 300 percent in the first half of 2026.
The rally also reflected improving sentiment across Wall Street, with the S&P 500 climbing about 1.5 percent to a fresh record after upbeat earnings from Palantir Technologies and Caterpillar, while easing oil prices boosted risk appetite. BofA said Samsung and Micron expect roughly 50 to 70 percent of capacity to eventually fall under multi-year supply agreements, which could reduce price volatility even as Chinese competitor CXMT expands.
Arya said the memory industry is shifting from quarterly negotiations toward multi-year supply agreements lasting three to five years or longer. That won't eliminate downturns, but it could improve supply visibility and reduce price volatility. Meanwhile, rental prices for Nvidia's flagship GPUs remain near historical highs, indicating customers still see substantial economic value in AI compute.
"Given raw compute is seldomly the bottleneck in AI inference, we view the GPUs' integrated HBM memory as the actual component in high demand," Arya said.
Chinese competition remains a concern. CXMT now represents a low-teens percentage of global wafer capacity, according to BofA. But Arya sees its impact concentrated in commodity DRAM rather than HBM3E and HBM4 used for advanced AI systems.
Micron's fiscal third-quarter revenue reached $41.46 billion, with non-GAAP EPS of $25.11. The company guided fiscal fourth-quarter revenue to approximately $50 billion and non-GAAP EPS to $31.00, with gross margin near 86 percent. Micron has signed 16 take-or-pay agreements covering roughly 20 percent of DRAM volume and one-third of NAND volume, with about $100 billion in minimum cumulative revenue.
The stock closed at $829.50 on Aug. 3, trading at roughly eight to nine times BofA's bear-case earnings estimate. Arya said that valuation remains consistent with the stock's historical "commodity-like framework."
The reiteration shows BofA believes the market is still valuing the new Micron like the old Micron, even after July's 28.7 percent collapse. Investors will watch Micron's fiscal fourth-quarter report, expected in late September, for updated guidance on HBM demand and capacity expansion.
This article is for informational purposes only and does not constitute investment advice.
