Micron (MU) Stock Drops 2% Before Earnings Report, But Analysts Remain Optimistic

Key Takeaways

• Micron shares declined 2% on Wednesday despite posting 276% gains year-to-date.
• Citi analyst upgraded price target to $1,300 from $1,150 before Q4 FY26 earnings scheduled for September 30.
• UBS projects Micron can only meet approximately 60% of DRAM market demand in the coming year.
• Analysts project Q4 revenue near $51 billion, representing a 350% year-over-year increase.
• Share repurchase programs resume in December after CHIPS Act restrictions expire, with buybacks potentially starting in February.

Micron Technology shares retreated 2% during Wednesday’s trading session, despite maintaining remarkable year-to-date gains of 276%. The pullback arrives just days before the memory semiconductor manufacturer releases fiscal fourth-quarter financial results on September 30.

Micron Technology, Inc., MU

Citi analyst Atif Malik maintains confidence despite the recent decline. He increased his price objective on MU from $1,150 to $1,300 while reaffirming his Buy recommendation, citing robust DRAM pricing trends on approximately 60% of Micron’s production volume that remains outside fixed-price contracts.

Malik holds the No. 3 position among more than 12,500 analysts monitored by TipRanks. His recommendations achieve a 79% accuracy rate and deliver an average 48% gain.

Analyst Projections for Upcoming Results

Wall Street forecasts Q4 FY26 earnings per share around $31.49, representing a substantial increase from $3.03 reported in the year-ago period. Revenue projections point to approximately $51 billion, reflecting a 350% surge year-over-year.

This explosive growth stems from artificial intelligence applications driving memory demand while supply remains constrained. Malik anticipates Micron will provide Q1 FY27 revenue guidance near $57 billion, with earnings per share approaching $35.25.

He also predicts continued share price appreciation leading into the SEMICON West conference, where equipment manufacturers are expected to highlight shortages across DRAM, MLCC, PCB boards and optical components. These supply chain constraints could limit DRAM and NAND bit-supply expansion to the low-20% range, maintaining elevated pricing through the following year.

Malik does anticipate price appreciation will moderate across the next four quarters, with memory pricing expected to reach its peak during Q2 2027.

Supply-Demand Gap Quantified

UBS analyst Timothy Arcuri echoes the optimistic outlook from a different perspective. He projects the disparity between memory-chip supply and demand will continue expanding into next year, estimating Micron can satisfy only about 60% of DRAM requirements during that timeframe.

Bit demand for server DDR memory could expand approximately 80% during the same window. Arcuri even forecasts bit demand for server and storage SSDs to more than double throughout 2027.

He’s advising investors to shift focus from revenue growth to capital allocation strategies, as Micron’s long-term supply contracts already limit how much analysts can adjust revenue projections upward.

The capital return narrative has a clear catalyst. Micron’s share repurchase programs have faced restrictions since accepting CHIPS and Science Act funding in 2022, but those limitations expire in December.

Arcuri forecasts quarterly buyback programs starting around $20 billion during the February quarter, eventually scaling toward $40 billion to $50 billion quarterly. He doesn’t anticipate significant buyback discussion during next week’s earnings announcement, believing management will exercise caution in their messaging.

Wolfe Research analyst Chris Caso aligns with his colleagues. He noted Micron’s long-term supply arrangements have strengthened investor conviction regarding the duration of the current growth cycle.

Wall Street maintains a Strong Buy consensus rating on Micron, featuring 30 Buy recommendations and one Hold. The average analyst price target of $1,563.04 suggests approximately 46% upside potential from present levels.

Market participants will gain additional clarity when Micron releases fiscal Q4 financial results after market close on September 30. Analysts indicate they’ll be monitoring DRAM and NAND supply forecasts for 2027 and 2028, gross margin trajectory, and HBM4 production developments.