Micron Technology (MU), one of the world's largest manufacturers of DRAM and NAND memory chips used across smartphones, PCs, automotive systems, and data center servers, is trading around $857, down roughly 12% over the past month and well below its late June peak above $1,200. The decline has been driven by investor concern about whether the chipmaker can sustain its elevated gross margins.

Mizuho analyst Vijay Rakesh, a 5-star rated analyst, is not convinced by the bearish view. He reiterated an Outperform rating on Micron and kept his $1,375 price target after meeting with company executives. The target implies about 60% upside from current levels.

Rakesh's central argument is that memory supply will remain tight. He wrote that "we believe Micron sees DRAM/NAND market tight well through 2027E," a setup he says should support stronger pricing and elevated margins. He also pointed to Micron's forward price-to-earnings ratio of below six — notably low for a semiconductor stock — as evidence that the stock still looks inexpensive relative to its earnings potential. According to Rakesh, long-term supply agreements should help lock in price premiums on future memory products, supporting gross margins above 80%.

China Competition Concerns Seen as Overstated

One of the main concerns weighing on MU has been the rise of Chinese memory maker ChangXin Memory Technologies (CXMT). Reports that Apple lobbied regulators to buy CXMT chips to offset global shortages added to those worries.

Rakesh pushed back on that narrative. He said any incremental real supply from CXMT is "only coming in 2028E and still no meaningful change to supply-demand imbalance." He also said CXMT is mainly focused on domestic Chinese demand and does not have the manufacturing capacity to produce advanced memory chips at scale.

Institutional activity also remained supportive. Handelsbanken Fonder increased its Micron position by 6.3% in the second quarter, adding 37,420 shares to bring its total to 630,685 shares, worth about $728 million. Institutional investors collectively hold 80.84% of Micron.

Strong Quarterly Results Support the Bull Case

Micron's latest quarterly report gave analysts more evidence to work with. The company posted earnings per share of $25.11, topping the consensus estimate of $21.39 by $3.72. Revenue came in at $41.46 billion, above the $35.91 billion forecast and up 345.8% year over year, underscoring the magnitude of the current memory demand surge.

The company guided fourth-quarter fiscal 2026 EPS to a range of $30 to $32. Analysts currently expect full-year EPS of $72.93.

Several other Wall Street firms have also turned constructive on the stock. Bank of America raised its price target to $1,500 and rates Micron Buy. Cantor Fitzgerald also has a $1,500 target and an Overweight rating. Goldman Sachs increased its target from $900 to $1,100 while keeping a Neutral rating.

Overall, the Street's consensus remains Strong Buy, with an average 12-month price target of $1,569.07, implying more than 84% upside from current levels.

One development worth noting is insider selling. Over the last quarter, insiders sold 162,179 shares worth about $167.8 million, including CEO Sanjay Mehrotra's sale of 31,285 shares at an average price of $926.83 on July 24.

High-bandwidth memory supply also remains tight. HBM, a specialized memory type stacked vertically to deliver the massive data throughput required by AI accelerators and next-generation data center GPUs, has been in especially short supply. UBS said Nvidia may have reduced planned HBM4E content in its upcoming VR300 GPU because of supply constraints, a factor that could further support Micron's pricing power.