Micron gains 260% in 2026 as analyst flags untapped data center revenue

Futurum analyst Brendan Burke sees Micron Technology's data center revenue exceeding market expectations, driven by AI demand for high-bandwidth memory and the company's full stack technology advantage.

"Micron's full stack approach — spanning DRAM, NAND and advanced packaging — gives it a competitive edge that investors are not fully pricing in," Burke, an analyst at Futurum, said.

Micron shares have surged 260 percent year to date, closing at 1,211.38 on Monday after hitting a record 1,213.56. The company reports fiscal third-quarter earnings Wednesday, with analysts projecting adjusted earnings of $20.76 a share on revenue of $35.75 billion — growth of 987 percent and 284 percent, respectively, from a year earlier.

The bullish thesis centers on AI data center demand for high-bandwidth memory, where Micron has secured certification as an HBM4 supplier for Nvidia's Vera Rubin platform. Market researcher TrendForce projects the memory market will reach $889.3 billion in 2026 and $1.28 trillion in 2027, suggesting Micron's growth runway extends beyond the current cycle.

Data Center Demand Reshapes Memory Market

Micron's data center business has become its primary growth engine. In fiscal Q2, DRAM revenue reached $18.8 billion, up 207 percent from a year earlier, accounting for 79 percent of total company revenue. NAND revenue hit a record $5 billion, up 169 percent year over year, as data center customers deployed AI applications requiring storage-intensive technologies.

The broader market is undergoing what TrendForce calls a "structural expansion" driven by agentic AI applications. Unlike static chatbots that solve single queries, agentic AI performs tasks in multiple steps, requiring memory caches to store tokens for longer periods. This shift is expected to push DRAM market revenue to $618.7 billion in 2026 — a fourfold increase — followed by $903.3 billion in 2027, according to TrendForce.

Micron, which held 22 percent of the DRAM market and 13 percent of the NAND market in the first quarter, is positioned to capture a significant share of that growth. The company has signed long-term supply agreements with strategic customers, including a five-year deal disclosed last quarter, and recently announced a partnership with AI company Anthropic covering memory and storage architecture design.

Full Stack Strategy Creates Competitive Moat

Burke's full stack thesis refers to Micron's ability to offer integrated memory and storage solutions rather than individual components. The company's portfolio spans DRAM, NAND flash, high-bandwidth memory and solid-state drives, allowing it to address multiple layers of AI infrastructure demand.

This breadth has attracted a range of analyst price targets, from Morgan Stanley's Joseph Moore at 1,050 to Needham's Quinn Bolton at 1,550, who cited market fundamentals remaining stronger for longer due to strong demand and limited capacity additions. Goldman Sachs, while lifting its target to 900, maintained a neutral rating, flagging that investor positioning is already bullish after the stock's sharp run.

Micron is also investing in domestic manufacturing capacity, with plans for 1-alpha DRAM production in Manassas, Virginia, and early site work in Idaho and New York as part of a broader $200 billion plan to increase US memory output for AI-focused data centers.

Micron trades at 22 times sales, a premium to the technology sector's average of 8 times. If the company captures even 20 percent of the projected $903 billion DRAM market in 2027, its revenue from that segment alone could approach $180 billion. With the stock up 858 percent over the past year and the memory market entering what TrendForce describes as a multiyear structural expansion, the debate centers on how much of that growth is already priced in.

This article is for informational purposes only and does not constitute investment advice.