Micron Technology (MU) shares slipped 1.2% to close at $1,063.96 on October 5. The dip came even as two major brokerages doubled down on their bullish calls for the memory chip maker.

Susquehanna Financial Group reiterated its "Positive" rating on the stock and kept its price target at $2,000. That figure is nearly double Micron's closing price and implies about 88% upside from current levels. Morgan Stanley took a more measured view but stayed firmly bullish as well, maintaining its "Overweight" rating and a $1,200 price target, suggesting roughly 10% upside.

The optimism follows a blowout fiscal 2026 for Micron. Revenue hit a record $133.2 billion, up 256% from the prior year, while gross margin expanded 40 percentage points to 81.1%. Earnings per share soared 811% to $75.52. The fiscal fourth quarter alone brought in $54.2 billion in revenue, up 379% year over year, marking the company's sixth straight quarterly record.

Why Analysts See More Room to Run

Susquehanna expects Micron to earn $176.39 per share on $284.56 billion in revenue in fiscal 2027 — a steep jump from fiscal 2026's $75.52 per share. The firm points to strong memory chip demand paired with disciplined industry spending, along with rising prices for high-bandwidth memory, or HBM. HBM is the high-speed, densely stacked memory packaged alongside AI processors, which makes it a core input for data-center AI systems and ties Micron's results directly to the pace of AI infrastructure buildouts.

Nvidia's upcoming Rubin platform and wider use of custom AI chips are expected to push HBM demand even higher. As those prices climb, Micron's margins could edge closer to the company average, according to Susquehanna. The firm does expect gross margin to dip in the November quarter before climbing again, and it sees the memory supply crunch lasting through 2028.

Morgan Stanley's Joseph Moore made a similar point in his October 1 note, writing that the debate has shifted from how good things can get to how long they can stay good. Moore noted that Micron's earnings beats have gotten smaller lately: the company topped estimates by just 5% this time, down from 20% to 40% in prior quarters. He does not see that as a warning sign, calling it "the new normal as Micron's visibility improves."

Supply Stays Tight Through 2028

Micron CEO Sanjay Mehrotra did not hold back on the earnings call, saying the company has no clear line of sight on when memory supply and demand will balance out. Customers are responding by locking in supply early. Micron has signed 26 strategic customer agreements worth a combined $32 billion in commitments, and more than 75% of the company's 2027 output is already spoken for, according to Mehrotra.

Moore described the long-term deals as proof of customer anxiety over securing memory years in advance. Building new capacity is not quick either: cleanroom construction takes years, and Susquehanna flagged this as a key bottleneck heading into the next few years. That lag is a big part of why memory markets have historically swung between shortages and gluts. Industry-wide spending discipline is expected to help keep supply from spiking too fast, while Micron's broad base of customers and products should soften any blow from a future downturn.

On the cash side, Micron plans to start returning excess cash to shareholders beginning in early December. Susquehanna forecasts around $100 billion in average annual free cash flow for 2027 and 2028 combined. If that cash goes toward buybacks, the firm Micron could repurchase about 16% of its outstanding shares. With the projected November-quarter margin dip and the December start of shareholder returns on the calendar, Micron's near-term schedule offers several concrete markers against which the brokerage theses can be checked.

Wall Street currently holds a Strong Buy consensus on the stock, with 25 Buy ratings and one Hold. The average analyst price target sits at $1,581.40, implying nearly 49% upside from current levels.

This article is based on reporting originally published by CoinCentral.