Micron’s Stock Surge Fueled by AI-Driven Chip Shortage

Micron Technology's shares are undergoing a significant reappraisal on Wall Street, with multiple research firms issuing substantial price target upgrades. HSBC has set the most bullish target at $500 per share. This wave of optimism is directly tied to supply constraints in the memory chip market, driven by insatiable demand from artificial intelligence applications.

A fundamental shortage in memory chip supply is at the core of the bullish sentiment. HSBC's aggressive $500 target cites rapid price increases for DRAM chips, particularly those used in servers and enterprise solid-state drives (SSDs). The bank attributes this tightness to massive procurement by AI data centers. For the current second fiscal quarter, HSBC forecasts an 88% surge in Micron's operating profit to approximately $12 billion.

This outlook follows the company's strong first-quarter performance, where revenue jumped 56.7% to $13.64 billion, significantly surpassing earnings expectations. Other firms, including TD Cowen and Stifel, have also raised their targets to $450 and $360, respectively, referencing these robust results.

Sold-Out Production and Margin Expansion

As one of only three global manufacturers of High-Bandwidth Memory (HBM)—a critical component for AI accelerators—Micron is in an exceptionally strong position. The company's entire HBM production capacity for 2026 is already sold out. This scarcity is not only elevating prices but also dramatically improving profitability. Micron's adjusted gross margin reached 56.8% in Q1, with management guiding toward 68% for Q2. Market experts anticipate these supply constraints will persist well into 2026.

Should investors sell immediately? Or is it worth buying Micron?

Concurrently, Micron is expanding its manufacturing footprint. A $2.75 billion chip fabrication plant in Gujarat, India, is slated to commence operations following successful test runs completed in late February.

Lofty Expectations and Share Performance

Investor expectations are high as Micron prepares to report its second-quarter results between March 19 and 23, 2026. The company's own guidance projects earnings per share in the range of $8.22 to $8.62. The prevailing analyst consensus remains a "Strong Buy" recommendation.

Reflecting this confidence, the stock is trading near its 52-week high of $401.40, marking an impressive advance of nearly 300% over the past twelve months.