Micron stock price set to explode! This Wall Street investment bank makes an aggressive prediction: "Memory will account for more than 70%!"

Micron stock price set to explode! This Wall Street investment bank makes an aggressive prediction: "Memory will account for more than 70%!"

Wall Street’s independent research firm Aletheia Capital has released an extremely aggressive research report on Micron Technology (MU), raising its target price sharply to $1600 and predicting that AI memory devices will account for over 70% of the value in AI hardware systems by 2027, completely overturning the traditional perception of the importance of memory chips in the market.

After the report was published, Micron’s stock price surged 10% overnight, with market sentiment heating up rapidly. Aletheia expects Micron’s EPS in fiscal year 2027 to grow 8.5 times from the current level, and to further expand by 1.8 times in fiscal year 2028, for a cumulative increase of 15 times. The firm forecasts that the company will generate a cumulative $350–$400 billion in free cash flow over the three years from FY26 to FY28.

The core logic behind this prediction lies in the continued surge in prices of HBM and server DRAM, as well as the structural leap in the proportion of memory devices in the bill of materials (BOM) for AI hardware. If these predictions come true, Micron will be one of the biggest beneficiaries of this round of the AI hardware cycle.

Target Price Jumps Directly to $1600, Valuation Framework Completely Switched

This time, Aletheia raised Micron’s target price from the previous $650 to $1600 in one go, a rise of over 140%, still offering 47% upside from the current share price. What’s even more noteworthy is the fundamental shift in its valuation framework—from the previous conservative pricing based on historical peak price-to-book ratios, to a profit-driven framework anchored on a projected 10x P/E ratio for fiscal year 2027.

The logic behind this switch: With AI structurally boosting demand for memory, Micron’s profitability is no longer suited to cyclical historical valuation methods, but should instead be priced by multiples referenced from growth tech companies.

HBM and Server DRAM Price Forecasts Both Revised Upward

At the price forecast level, Aletheia’s upward revisions also exceed market expectations. According to the report, the firm now expects the average selling price (ASP) of server DRAMs to rise 30% quarter-over-quarter in Q3 2026, far above the previous forecast of 10–15%; in Q4 2026, an additional increase of 10–15% is forecast.

For HBM, Aletheia predicts its ASP will double year-over-year in 2027. This judgment is based on the continued explosive demand for high-bandwidth memory for AI training and inference, with high technical barriers on the supply side further supporting the price base.

Memory Devices’ BOM Share to Exceed 70%, Vera CPU Rack May Reach $26 Million

The most impactful forecast in the report comes from its analysis of AI hardware systems’ material structure. Aletheia points out that the proportion of memory devices in the total value of AI hardware systems is expected to leap from around 40% in 2025 to over 70% in 2027, with memory set to become the most crucial core component in AI hardware systems.

Taking Nvidia’s Vera CPU as an example, the report notes that the SoCAAM alone will account for over 70% of the BOM in the second half of 2026; and a full-spec Vera CPU rack may have an ASP as high as $26 million.

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