Micron Technology shares fell about 2% in premarket trading after OpenAI paused testing of some advanced AI models. The pause revived a familiar worry on Wall Street: how durable is demand for the chips that power artificial intelligence? The timing is awkward for Micron, which reports fiscal fourth-quarter 2026 results on September 30.
The expectations going into that report are enormous. Analysts are looking for adjusted earnings of about $31.46 per share, up from $3.03 a year ago, on revenue of roughly $51.19 billion, an increase of more than 350%.
One closely watched bull isn’t backing down. DA Davidson analyst Gil Luria reiterated his Buy rating and $2,000 price target on Micron stock, which implies more than 80% upside. He expects the company to beat estimates and argues the market still misreads what kind of business Micron has become.
What Wall Street Expects on September 30
The consensus numbers show how far Micron has come in a single year.
| Metric | Q4 FY2026 (consensus) | Q3 FY2026 (actual) | Q4 FY2025 (actual) |
|---|---|---|---|
| Adjusted EPS | $31.46 | $25.11 | $3.03 |
| Revenue | $51.19 billion | $41.46 billion | $11.32 billion |
A recent habit of clearing the bar
Micron’s last report set a high standard. Third-quarter revenue reached $41.5 billion, up 346% year over year, above both the $36.3 billion consensus and the top of the company’s own $34.3 billion guidance. Adjusted earnings of $25.11 per share also topped estimates of $20.49. Luria believes that momentum, supported by growth and long-term contracts, can carry into the new quarter.
Why DA Davidson Is Staying Bullish
Memory has become an AI bottleneck
Luria’s core argument is that AI models consume memory at an extraordinary rate. More memory lets models process more data, respond faster and handle longer context. According to his note, many customers still can’t get enough memory, and new supply may take at least another year to arrive. That fits the company’s own outlook: Micron expects tight supply and demand conditions to continue through at least calendar 2027.
He also pointed to new consumer AI products, including Meta’s Muse, as fresh demand drivers for AI infrastructure and, by extension, memory.
Contracts are replacing spot prices
Luria rejects the idea that memory is still a pure commodity just because spot prices exist. Micron’s high-bandwidth memory (HBM), along with its custom DRAM and NAND products, is increasingly designed alongside customers and sold under long-term agreements. Micron became the first memory supplier to announce a five-year supply deal, in March. Luria has argued that moving away from one-year contracts materially improves demand visibility and pricing stability. In his view, today’s Micron looks very different from the company investors knew in 2023.
How DA Davidson’s target has climbed
| Date | Action | Price target |
|---|---|---|
| April 28, 2026 | Initiated at Buy | $1,000 |
| May 2026 | Raised, Buy maintained | $1,500 |
| June 25, 2026 | Raised, Buy maintained | $2,000 |
| Late September 2026 | Reiterated ahead of Q4 | $2,000 |
When the firm initiated coverage, its $1,000 target implied roughly 91% upside from a $524.56 closing price. The current $2,000 target is based on a 13x multiple of expected earnings, according to the source report.
The CPU Comparison Behind the Valuation Case
Luria frames memory and CPUs as two essential ingredients of AI systems, both tied to the same infrastructure buildout. Yet investors value them very differently. Earlier this year, he noted that AMD and Intel traded at more than 40 times earnings while Micron traded at about 9 times, despite its rally. His read is that the market treats the memory cycle as nearly over while still pricing in years of CPU growth. He thinks a strong quarter could help narrow that gap.
What the OpenAI Pause Means for Now
The initial report did not say which models OpenAI paused or for how long, and there is no confirmed link yet to chip orders. The selling spread beyond Micron, with Meta shares down about 3.8%. For now, the reaction reflects sentiment rather than any reported change in demand. That makes Wednesday’s results and guidance the more concrete test.
Where the Street Stands on Micron Stock
Analysts remain broadly positive. TipRanks shows a Strong Buy consensus based on 20 Buy ratings and one Hold over the past three months. The average Micron stock price target of $1,509.25 implies close to 40% upside from current levels. DA Davidson sits at the top of that range.
Disclaimer: This content was partially produced with the help of AI tools and This content is for informational purposes only and not investment advice.
