Micron Wins Over Wall Street Despite Goldman Sachs Caution

Micron Technology Inc. (MU) has impressed Wall Street with its fiscal fourth-quarter earnings, but Goldman Sachs remains cautious despite raising its price target. The memory-chip manufacturer reported adjusted earnings of $33.42 per share and revenue of $54.23 billion, a significant jump from the prior quarter's $41.46 billion. Management forecasts revenue of $61.5 billion for the fiscal first quarter.

Goldman Sachs analyst James Schneider increased his price target from $1,100 to $1,250 but maintained a neutral rating. He acknowledges strong short-term demand due to limited DRAM and NAND supply through 2027 and 2028 but questions the sustainability of the memory cycle beyond 2027. Schneider warns that increased capacity could lead to oversupply by 2028, potentially pressuring profitability and pricing.

Micron is working to stabilize the cycle by securing key client agreements. The company has increased these agreements from 16 to 26, covering around 35% of projected revenue through fiscal 2030. About 75% of these agreements include structured price clauses.

Wall Street analysts are overwhelmingly bullish, with 25 Buy ratings and only one Hold rating from Goldman Sachs. The next challenge is whether memory manufacturers can maintain supply discipline to support Micron's projected growth.