KeyBanc Upgrades Micron Technology, Sees Strong Recovery in Memory Market Cycle

KeyBanc has upgraded Micron Technology (MU) to 'Overweight' and raised its price target to $120 per share, reflecting a shift in the company's underlying market trajectory. The investment firm now views the current memory cycle as materially different from past downturns due to structural changes in data center and AI-driven storage demand. This marks a significant change from previous cycles where oversupply dominated sentiment and pricing pressures were prolonged. The upgrade is anchored in Micron’s projected revenue growth of over 35% year-over-year in fiscal 2026, driven by strong demand for high-bandwidth memory (HBM) and enterprise SSDs. KeyBanc forecasts MU’s gross margins to expand to 47% by Q2 2026, up from an average of 36% in the prior fiscal year, signaling improved operational efficiency and pricing power. These improvements are attributed to reduced inventory levels across the supply chain and tighter supply-demand balance in the DRAM and NAND markets. Market participants have responded positively, with MU shares rising 6.8% in after-hours trading following the report. Investors in tech-heavy indices, including the Nasdaq-100, stand to benefit from enhanced exposure to semiconductor equities as AI infrastructure spending continues to accelerate. Analysts also note that Micron’s growing presence in advanced packaging and vertical integration could further bolster margins in the coming quarters. KeyBanc’s revised outlook underscores a broader reevaluation of cyclical semiconductor stocks, with MU positioned as a leader in capitalizing on next-generation data demands. The firm anticipates continued momentum in the second half of 2026, particularly in server and automotive memory segments.