Raymond James: AI storage demand is hot, raising Micron Technology's (MU.US) target price to $1,100.

Before the financial report of Micron Technology, Inc. (MU.US) on June 24, Raymond James raised Micron Technology, Inc.'s stock target price from $530 to $1100 and reiterated its "outperform" rating. On Monday, the stock price of this storage chip manufacturer soared over 6%, breaking through the $1000 mark. "As expected, Micron Technology, Inc. has been a hot topic in our recent visits. Despite the continuous rise in stock price and P/E ratio, we noticed that there has not been a significant withdrawal of funds from the investor base; everyone generally believes that this situation is indeed 'different from before'. Not only are all suppliers more rational in capacity expansion, but the entire industry has never experienced a similar demand environment, with multiple customers making substantial investments at the same time," said the analyst team led by Melissa Fairbanks. Analysts pointed out that in their recent visits to South Korea and Taiwan, they met with Samsung, SK Hynix, and other supply chain companies, and participated in a conference call with Kioxia hosted by their Japanese partner SBI last week. Analysts added that product supply has been out of stock continuously for many years, prices remain strong, and customers' forecasts for long-term demand are clearer. Analysts stated that they have no worries about the continued strong demand and pricing, thanks to the continuous increase in long-term agreements (LTAs). However, they also noted that the current supply constraints may suppress revenue growth in the short term. Analysts also added that management has also noticed that gross margins may gradually decline from the peak level in the May quarter. "This does not concern us in itself it is a natural development trend under current supply conditions, with additional supply not coming online until later in 2027 but we suspect that the recent AI-driven growth momentum may stagnate in the first quarter due to relative softness," Fairbanks and her team said.