Micron Stock, SanDisk Rally After Buy Ratings
Micron stock surged after Melius Research initiated Buy coverage and set two-year targets, prompting analyst upgrades and short-term trader positioning.
KEY TAKEAWAYS
- Melius initiated Buy coverage with two-year targets of $700 for Micron and $1,350 for SanDisk.
- Melius forecasted decade-long AI-driven demand for HBM DRAM and NAND supporting tighter pricing and margins.
- Proposal of subscription-style supply deals could materially re-rate memory suppliers on revenue visibility.
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Micron stock and SanDisk rallied on April 27, 2026, after Melius Research initiated Buy coverage, citing sustained AI-driven demand for high-bandwidth memory (HBM), DRAM, and NAND. The firm set two-year price targets that prompted broader analyst upgrades.
Analyst Upgrades and Targets
Melius Research analyst Ben Reitzes initiated Buy ratings on Micron (MU) and SanDisk stock (SNDK), setting two-year price targets of $700 for Micron and $1,350 for SanDisk, implying upside of 41% and 36%, respectively. Morgan Stanley raised its SanDisk target to $1,100 from $690 and assigned an Overweight rating. Bank of America increased its SanDisk target to $1,080 from $900 with a Buy rating, projecting adjusted gross margins in the mid-60% range for Q3 2026 and fiscal 2026 revenue of about $10.45 billion, roughly 42% higher year over year. SanDisk’s consensus rating remains Buy, with an average target of $695 across 21 analysts and a separate consensus figure near $848.
Mizuho also recommended buying both Micron and SanDisk after recent selloffs, citing AI demand and optical interconnects as key drivers.
AI Memory Demand Outlook
Melius projects AI-driven memory demand will persist through 2026–2030, supporting strong growth for HBM, DRAM, and NAND as hyperscalers and agentic or physical AI workloads expand. The firm forecasts NAND bit growth near 20% and expects AI servers to account for more than 45% of NAND shipments.
The research note highlighted potential "inverse SaaS" subscription-style supply agreements for memory, which could lock in minimum revenue and gross margins amid tight supply. Melius suggested valuations could double or triple if such contracts become widespread, significantly improving revenue visibility and re-rating prospects for memory suppliers.
SanDisk’s gross margin in the HBM market was reported at 34.8%, while enterprise SSD prices rose roughly 33% to 38% quarter over quarter in Q1 2026. These data points supported several firms’ bullish revisions.
Analysts continue to caution about standard semiconductor cyclicality, including demand slowdowns and competitor capacity expansions, which could temper gains if AI-driven spending softens.
