Micron (MU.US) once again receives a $1500 price target! TD Cowen calls out: AI memory has permanently raised profit potential "ceiling"

In the artificial intelligence arms race, memory is by no means a "supporting role". Micron Technology, Inc. (MU.US) has recently received strong recognition from Wall Street, with bullish research reports coming in. On Monday, TD Cowen analyst Krish Sankar significantly raised its target price from $660 to $1500. Investors are digesting the logic of "DRAM demand increase" and "extended pricing power cycle", and the stock price has responded with a significant increase. Sankar ranks 13th among 12304 analysts on Wall Street, with this increase of $840 being the highest, and the stock has already risen by 843% over the past year. The institution maintains a "buy" rating and stated in the research report that the revised target price is based on its forecast of $150 in earnings per share (EPS) for the calendar year 2027. As of the closing on June 16, the 47-year-old memory giant was trading at $1020.76, hitting a high of $1110.44 in intraday trading; as of the time of writing, the stock was up 4.67% in after-hours trading, at $1068.39. Year-to-date, the stock has risen by 281.36%, ranking third in the S&P 500 index component stocks, behind only SanDisk (811%) and Western Digital Corporation (308%). TD Cowen's call for a $1500 target price is not only based on the uptrend in the memory cycle, but also on a structural logic - the strategic value of memory in the AI era, and when this value will be realized in financial reports. Target price logic: reevaluation of pricing cycle + leap in structural demand This target price adjustment is based on two core arguments, differentiating it from traditional memory cycle upgrade reports. First, a revision of the pricing timetable. The institution previously expected a digestion period in the first half of the calendar year 2027, but this expectation has now changed. The report points out that CPU demand is driving buyers to expect strong pricing to continue until the second half of the calendar year 2027. Sankar now expects server DRAM prices to peak in the third quarter of 2026 - in a typical DRAM cycle, memory stocks often experience extreme prosperity and recession, with prices fluctuating significantly. The second, more crucial argument is that TD Cowen explicitly states that the role of memory in AI is structural rather than cyclical. Even with consideration for SOCAMM specification adjustments, the amount of DRAM corresponding to each gigawatt (GW) of power consumption continues to increase - this means that the construction of AI infrastructure will drive a continuous increase in memory strength, without the mean regression seen in traditional server cycles. The forecast of $150 in EPS for the calendar year 2027 is based on this embedded structural demand in Micron's profit base. Other institutions are following suit. RBC Capital has raised its target price to $1200, citing continued uptrend in DRAM cycle to the 12th quarter, with both pricing and shipment volumes strengthening. Aletheia Capital has further raised its target price to $1600 and switched to a price-to-earnings valuation framework based on expectations for 2027. Wolfe Research has also raised its target price to $1250, expecting continued uptrend in DRAM and NAND pricing in 2026-2027. Q2 Financial report: Multiple records broken, solidifying bullish logic The financial foundation for all the target price increases is Micron's performance in the second quarter of the 2026 fiscal year ending in March - where multiple indicators hit record highs for the company. Revenue reached $23.86 billion, far exceeding the $8.05 billion in the same period last year; GAAP net income was $13.79 billion. DRAM revenue was $18.8 billion, a whopping 207% year-on-year increase, accounting for 79% of total revenue; NAND revenue was $5 billion, up 169% year-on-year. Free cash flow reached $6.9 billion, setting a quarterly historical record. Micron has broken historical peak values in revenue, gross margin, earnings per share, and free cash flow dimensions. "In the AI era, memory has become a strategic asset for our customers," said CEO Mehrotra. He also approved a 30% increase in quarterly dividends - a clear signal from management of confidence in the sustained profitability, not just a one-off quarter. Q3 Guidance: Astonishing growth rate, June 24 financial report as a litmus test For the third quarter of the fiscal year 2026 to be released on June 24, Micron is guiding revenue to $33.5 billion, gross margin of around 81%, and non-GAAP earnings per share of $19.15. If this guidance is met, the quarterly revenue will jump from $23.86 billion to $33.5 billion, marking one of the fastest revenue acceleration records for a large semiconductor company. From the Q3 guidance to TD Cowen's $150 EPS target for the calendar year 2027, the path is clear: HBM continuous ramp-up, strong pricing for DRAM throughout the second half of 2026, AI infrastructure spending without major disruptions - with the current commitment of super-scale cloud vendors to capital expenditures, there are no signs of weakness in the above conditions. Additionally, Micron has selected BOC for the engineering, procurement, and construction of Phase 1 of its new manufacturing site in Clay, New York, aiming to build domestic production capacity to support commercial needs and the U.S. government's priority in semiconductor self-sufficiency. Furthermore, Alexis Black Bjoerlin, an AI infrastructure expert with board experience in companies such as NVIDIA Corporation, Meta, Broadcom Inc., and Intel Corporation, has joined Micron's board, indicating that the company is building strategic depth in line with financial momentum. The June 24 financial report will be the next "stress test". The confidence conveyed by TD Cowen's $1500 target price is that the role of memory in the AI era has permanently raised the "ceiling" of Micron's profitability.