Analysts Bullish on Micron, Citing Multi-Year AI Data Center Expansion Cycle

Analysts Bullish on Micron, Citing Multi-Year AI Data Center Expansion Cycle December 26, 2025 The strategic importance of memory and storage suppliers has been magnified by the artificial intelligence boom, positioning companies like Micron Technology at the center of a critical infrastructure build-out. Analysts are now highlighting a multi-year expansion cycle for data centers driven by AI workloads, which is expected to underpin sustained demand for memory products. On December 18, investment firm Lynx Equity significantly raised its price target for Micron (NASDAQ: MU) to $325 from $180, reflecting a highly constructive long-term outlook. The firm cited the memory cycle entering its next phase, robustly supported by AI-driven demand. It acknowledged that the stock's recent strength mirrors extreme movements in DRAM pricing, with supply constraints so severe that an estimated 30% of end-user demand is currently going unmet. These supply-demand imbalances are anticipated to normalize by mid-2026 as new production capacity comes online. While the stock's rapid appreciation may lead to volatility and pullbacks, Lynx Equity views such periods as buying opportunities rather than signals to exit. The firm's longer-term thesis is anchored in the planned capacity ramp from memory suppliers, which reflects deep confidence in sustained demand from cloud service providers (CSPs) as they advance their AI infrastructure projects. "We believe memory/storage vendors are planning for a 2-3 year data center capacity ramp," analysts at Lynx stated. They added that their bullish stance is derived from a differentiated narrative focused not just on price dislocation but on the rising supply over the next few years as an indicator of suppliers' confidence in underlying AI data center demand. The firm expects memory suppliers to be judicious in their capital expenditure decisions during this upcycle, leading to normalized supply dislocations and significantly higher operating profits. Based on this outlook, Lynx raised its earnings estimates and price target, which is predicated on a 13x multiple of its calendar year 2027 earnings per share estimate of $25. The analysis underscores a broader industry shift where memory capacity planning is now directly tied to the multi-year trajectory of AI adoption. As CSPs enter the next phase of AI build-out, suppliers like Micron, which develops critical memory and storage products for data centers worldwide, are poised to be key beneficiaries of this extended investment cycle. Source: Yahoo Finance