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In 2025, Micron Technology (MU) delivered a standout performance, with its stock climbing 240% amid the explosive growth of artificial intelligence (AI). As a key player in the AI ecosystem, MU benefited immensely from surging demand for high-bandwidth memory (HBM), which powered data centers and advanced computing. This led to fully sold-out inventory throughout 2025 and persistent strong orders spilling into 2026, solidifying MU's position as a semiconductor leader.

With the first trading session of the new year now complete, MU shows every sign of maintaining its impressive trajectory, starting 2026 right where it left off.

The Spark for an Early Surge

The momentum carried over seamlessly into 2026, as MU shares rose 10% on the year's first trading day. This boost followed a positive note from Bernstein analyst Mark Li, who increased his price target on the stock to $330 from $270 per share while keeping an "outperform" rating. Based on MU's closing price at the end of 2025, this adjustment points to roughly 16% potential upside, reflecting Wall Street's confidence in the company's ongoing growth.

Li's upgrade is in step with a broader wave of optimism among analysts, triggered by MU's robust earnings report in December. The results highlighted exceptional revenue from HBM sales and optimistic guidance for the quarters ahead, prompting several firms to revise their forecasts upward.

For instance, Morgan Stanley, Cantor Fitzgerald, and KeyCorp all raised their price targets to $350, citing MU's dominant role in supplying memory solutions for AI applications. The consensus target, though, is $305 per share.

A Galeforce Tailwind Pushing MU Forward

This enthusiasm underscores MU's strategic advantages in a market where AI infrastructure demands are accelerating. HBM – essential for high-performance GPUs used in machine learning and data processing – remains in short supply, giving MU pricing power and margin improvements. The company's investments in next-generation technologies, including advanced nodes and expanded production capacity, position it to capture even more market share.

Investors are particularly encouraged by Micron's guidance, which projects sustained demand through 2026 and beyond, potentially driving earnings per share higher than previously anticipated.

Despite broader market uncertainties, such as potential economic slowdowns or shifts in tech spending, MU's fundamentals appear strong. The semiconductor cycle, while historically volatile, is currently tilted in favor of AI-driven segments, where MU excels.

Bottom Line

Micron's exceptional performance seems likely to continue in 2026, fueled by persistent inventory shortages, the rising needs for HBM, and higher profit from upcoming innovations like HBM4. Fully committed production and an improved earnings outlook support the long-term growth story, which could warrant premium pricing as memory becomes central to AI advancements.

Nevertheless, following its dramatic ascent, the stock risks suffering a pullback if demand weakens or there are hiccups in implementing its plan. Non-AI areas still face cyclical fluctuations, and Wall Street's lofty projections for future growth may increase volatility.

Regardless, Micron stands out as a solid stock to buy for investors bullish on AI's continued expansion. Trading at deeply discounted valuations – 29x trailing earnings, less than 9x estimates, and a minuscule ratio to projected earnings growth – the stock is one to pick up with both fists, especially on any pullbacks.

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