Micron Appears Unbeatable in Pricing as AI Demand Surpasses Available Supply

Micron Technology: AI Drives Memory Demand Surge

Micron Technology Inc. (NASDAQ: MU) is benefiting from a surge in memory demand fueled by artificial intelligence, according to JP Morgan. The firm anticipates that the appetite for DRAM—particularly high-bandwidth memory (HBM)—will continue to exceed available supply well beyond 2026. This ongoing imbalance is expected to keep prices elevated and supports JP Morgan’s optimistic outlook for Micron’s stock.

Insights from Recent Investor Meeting

JP Morgan analyst Harlan Sur recently organized a meeting with Micron’s Chief Financial Officer Mark Murphy, Chief Business Officer Sumit Sadana, and Senior Director of Investor Relations Samir Patodia. Following the discussion, Sur reaffirmed an Overweight rating for Micron and maintained a price target of $350 per share.

The company’s leadership expressed strong confidence in the continued growth of both DRAM and NAND demand, noting that customers are increasing their requirements for memory and storage solutions.

Industry Trends Support Bullish Outlook

Sur highlighted that trends in Graphics Processing Units (GPUs) and eXtreme Processing Units (XPUs) reinforce this positive view. For example, Nvidia Corp. (NASDAQ: NVDA) has indicated that its Rubin and Blackwell product backlogs, valued at over $500 billion, are expected to grow through the end of 2026. Similarly, Broadcom Inc. (NASDAQ: AVGO) is seeing rising volumes of Tensor Processing Units (TPUs), and JP Morgan has raised its CoWoS (Chip-on-Wafer-on-Substrate) capacity forecasts, partly due to these higher TPU expectations.

Challenges in Meeting Demand

Despite robust demand, Micron faces limitations in expanding supply, primarily due to a shortage of clean-room space. Nevertheless, Sur believes that advances in manufacturing processes, improved production efficiency, and faster yield ramp-ups should enable at least 20% growth in bit shipments for both DRAM and NAND in 2026.

However, this supply growth still lags behind the anticipated demand increase, which JP Morgan projects will exceed 30% year-over-year. Even so, the current outlook marks an improvement compared to expectations just three months ago.

DRAM and HBM Demand Continues to Outpace Supply

Sur expects the demand for DRAM and HBM to remain ahead of supply beyond 2026, even as new manufacturing capacity is added. This persistent tightness is likely to further support strong pricing in the memory market.

Micron’s management indicated that the company can only fulfill between half and two-thirds of its key customers’ medium-term bit requirements. Even as new clean-room facilities are set to become operational in 2027, demand is expected to continue outstripping supply.

The timeline for the first wafer production at Micron’s Idaho 1 facility has been moved up by about a quarter to mid-2027, but the expansion will be gradual due to physical constraints rather than financial limitations. Sur also noted that other industry players are likely to experience similar slow capacity increases as they bring new facilities online in late 2027 and 2028, while demand keeps climbing.

JP Morgan forecasts that this ongoing supply-demand imbalance will support strong pricing at least through 2026, with average DRAM prices projected to rise nearly 60% year-over-year in that period.

AI Workloads Fuel New Opportunities for NAND

Micron sees rapidly growing demand for NAND driven by context window memory management, a trend accelerated by new AI workloads. Management was unsurprised by Nvidia’s recent announcement of its Inference Context Window Storage platform, as major cloud providers and companies with in-house AI infrastructure are already developing or deploying key-value (KV) cache management systems to handle expanding context windows and reduce pressure on HBM and system memory.

This development could open up new avenues for NAND bit growth, with high adoption rates expected for Nvidia’s Bluefield-4 based systems. Micron does not anticipate that KV cache offloading will affect customers’ HBM plans, which are already set for the next few years.

Additionally, Micron expects that physical AI applications—especially robotics—will become a major driver of memory demand, following the rapid growth seen in generative AI. Management described customer plans as “incredible” in scale, citing examples where advanced humanoid robots may require 64–128GB of DRAM and 1–2TB of NAND, with these figures likely to increase over time. Scaling these requirements across millions of units would significantly boost overall memory demand.

Micron Stock Performance

MU Price Update: At the time of reporting on Thursday, Micron shares had declined by 3.51% to $327.62, approaching their 52-week high of $346.30, according to Benzinga Pro data.

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Related Market Data

• Micron Technology Inc (MU): $325.13 (-4.25%)
• Broadcom Inc (AVGO): $330.96 (-3.65%)
• NVIDIA Corp (NVDA): $183.95 (-2.73%)