Micron Wins Wall Street’s Favor Despite Goldman Sachs’ Caution

Micron Technology Inc. (MU) has overwhelmingly impressed Wall Street analysts following its strong fiscal fourth-quarter earnings. Nearly all analysts have given the memory-chip maker a Buy rating, with just one Hold rating from Goldman Sachs. Micron reported adjusted earnings of $33.42 per share and revenue of $54.23 billion, a significant jump from the previous quarter's $41.46 billion. For the first half of the fiscal first quarter, management projects revenue to hit $61.5 billion.

James Schneider, an analyst at Goldman Sachs, raised his price target from $1,100 to $1,250 but maintained a neutral rating. Schneider acknowledges the current demand and limited supply of DRAM and NAND chips, which could support Micron's performance into 2027 and 2028. However, he questions the long-term sustainability, as rising memory prices may encourage manufacturers to increase capacity, potentially leading to oversupply and pricing pressure.

Micron is working to stabilize this cycle by securing key client agreements. The company now has 26 such agreements, up from 16, covering about 35% of projected revenue through fiscal 2030. Around 75% of these agreements include structured price clauses, aimed at mitigating future risks.

The overwhelmingly positive outlook from analysts, with 25 Buy ratings, highlights the optimism surrounding Micron's future. However, the challenge remains whether memory manufacturers can maintain supply discipline to support the projected growth.