Citi reaffirms its bullish outlook on Micron Technology (MU), citing strong AI-driven demand for memory solutions and improving inventory dynamics. The firm highlights MU’s projected revenue growth and margin expansion in the coming quarters.
- Citi maintains a bullish rating on Micron (MU) with a $145 price target
- AI-driven memory demand projected to grow at over 40% CAGR through 2027
- MU’s Q4 revenue reached $7.2 billion, 12% above expectations
- Gross margins expanded to 44.3% in the latest quarter
- Projected revenue of $32.8 billion for fiscal 2026, up from $27.1 billion in 2024
- Dividend growth forecasted at 15% annually, supporting capital return strategy
Citi has sustained its positive investment recommendation on Micron Technology (MU), emphasizing the company's strategic positioning within the expanding AI infrastructure market. The firm notes that increasing data center demand for high-bandwidth memory (HBM) is accelerating Micron’s revenue trajectory, with AI-related memory sales expected to grow at a compound annual rate of over 40% through 2027. The bank points to Micron’s recent quarterly results, where revenue reached $7.2 billion, surpassing expectations by 12%, driven by stronger-than-anticipated demand from cloud service providers and enterprise clients. Gross margins expanded to 44.3%, up from 39.1% in the prior quarter, reflecting improved pricing power and efficient production scaling at its latest 1α process node. Citi's model projects MU’s annual revenue to reach $32.8 billion by fiscal 2026, up from $27.1 billion in 2024, underpinned by a 28% increase in server memory shipments. The firm also anticipates sustained capital return to shareholders, with a projected dividend growth rate of 15% annually and a revised buy rating supported by a target price of $145 per share. The market response has been favorable, with MU shares rising 3.2% in early trading, outperforming the broader semiconductor index. Investors in AI-focused ETFs such as ARKQ and SOXX are closely watching Micron’s performance as a bellwether for memory sector health.