Freedom experts: memory shortage will extend Micron’s business growth through 2028

Freedom Broker analysts reaffirmed their “Buy” rating on shares of U.S. memory maker Micron Technology (MU) and a $1600 target price. Relative to the closing price of $1063,9, this implies 50,4% upside potential. The experts raised their forecasts for the company: limited manufacturing capacity and long-term contracts support the business outlook for 2027–2028.

Memory for servers and artificial intelligence

Micron produces memory chips and data storage systems for smartphones, computers, cars, and servers. One of its key areas is high-bandwidth memory, which helps quickly transfer large volumes of data when training and running artificial intelligence.

The expansion of AI infrastructure is boosting demand for such products. However, it is not enough for manufacturers to install additional equipment: increasing output requires space and time for construction.

The shortage may intensify over the next two years

Freedom Broker analysts’ main conclusion concerns the duration of the upswing in the memory market. According to an updated assessment by Micron management, the shortage in 2027–2028 will be more acute than in 2026. Production expansion is constrained by a lack of space, while additional construction investments will have their main impact from late 2028.

At the same time, more than 75% of 2027 output has already been allocated to customers. Long-term agreements provide for about $150 млрд in future revenue at minimum contractual prices. This increases the predictability of the business: part of future demand is confirmed by contracts long before deliveries, the experts note.

Thus, the investment thesis rests on a combination of high demand, limited supply, and pre-agreed sales terms. Analysts view these factors as grounds for maintaining a positive assessment of Micron.

Quarterly revenue rose nearly fivefold

In the fourth quarter of fiscal 2026, Micron’s revenue amounted to $54,23 млрд versus $11,32 млрд a year earlier. Growth reached 379%, and 30,8% versus the previous quarter.

Net income under U.S. GAAP rose from $3,20 млрд to $37,70 млрд. Adjusted profit came to $38,40 млрд, or $33,42 per share, versus $3,47 млрд and $3,03 a year earlier.

GAAP gross margin increased from 44,7% to 86,8%. Operating cash flow reached $43,97 млрд versus $5,73 млрд a year earlier. After capital expenditures, adjusted free cash flow totaled $33,20 млрд.

For the full fiscal year, revenue increased from $37,38 млрд to $133,19 млрд, and net income from $8,54 млрд to $84,97 млрд. The company ended the year with $73,48 млрд in cash, marketable investments, and restricted cash.

The company expects further sales growth

For the first quarter of fiscal 2027, Micron forecasts revenue in the range of $60–63 млрд. The midpoint of the forecast — $61,5 млрд — is 13,4% higher than the result of the previous quarter.

Adjusted earnings per share are expected to be within $37,15–39,15, and gross margin at 86,25%. Management is aiming for a new record fiscal year and is increasing investments in technology, products, and manufacturing.

At the same time, strong demand is already largely reflected in the share price, Freedom Broker analysts note. Therefore, even good results do not guarantee an immediate rise in the stock. An additional risk is tied to funding for AI projects: the reliability of component orders also depends on buyers’ ability to pay for large-scale investments. A deterioration in capital-raising conditions could affect technology leaders and their suppliers.

Electronics makers’ orders remain an additional factor

In mid-August, Micron shares received support after U.S. authorities spoke out against Apple (AAPL) purchasing memory chips from Chinese manufacturers. During trading, Micron shares gained up to 6%.

Freedom experts linked the move to expectations that orders would be reallocated in favor of American suppliers. However, a lasting effect is possible only if the supply chain actually changes: a political statement alone is not enough for further gains in the share price.

Not an individual investment recommendation.