Micron Technology (NASDAQ: MU) has gained more than 260% this year, but D.A. Davidson analyst Gil Luria believes the market still has not fully valued the memory-chip maker's earnings power or AI-related business. On Wednesday local time, Luria raised his price target to $3,000 from $2,100, implying roughly 176% upside from the stock's level at the time and placing it among the highest targets on Wall Street.
Micron shares rose 4.1% on Wednesday but fell about 2% on Thursday after Samsung Electronics issued a record profit outlook. In the latest market update, Micron was trading at $1,036.68, down 4.72%. The short-term swings reflect investors' continued reassessment of AI demand, the memory-chip cycle and the company's valuation.
December 9 could change Micron's buyback pace
Luria said in a television interview that short sellers face a clear near-term date: restrictions tied to Micron's funding agreement under the U.S. CHIPS and Science Act expire on December 9. Once those restrictions end, Micron could increase the size of its share repurchases.
Micron held $68.3 billion in net cash at the end of fiscal 2026. Chief Financial Officer Mark Murphy said on the company's September earnings call that management plans to return all excess cash to shareholders over time, primarily through buybacks. Micron currently has $2.2 billion remaining under its repurchase authorization, and management also plans to seek additional approval.
For short sellers, a larger buyback could reduce the number of shares in circulation and affect both earnings per share and the stock's performance. Luria said the ability of short positions to remain in place could therefore be influenced by the timing of the December restriction expiry. The ultimate size and pace of any repurchases, as well as approval for additional authorization, will still depend on Micron's capital-allocation decisions.
Luria says Micron is still valued like a cyclical stock
Luria believes some investors continue to view Micron as the kind of cyclical memory-chip manufacturer seen in 2023, without fully accounting for the role its products play in AI infrastructure. Micron currently trades at about six times earnings, compared with price-to-earnings ratios of at least 40 times for Advanced Micro Devices (NASDAQ: AMD) and Intel (NASDAQ: INTC), according to his comparison.
Luria estimates that Micron represents about 3% of the Nasdaq-100 by market capitalization but could contribute roughly 10% of the index's earnings over the next year. If that view proves accurate, funds underweighting Micron could face greater benchmark-performance divergence.
The $3,000 target implies a valuation of about 19 times Micron's expected fiscal 2027 earnings. Luria's central argument is that the stock's earlier rise was driven mainly by earnings growth, while a broader expansion in its valuation multiple has yet to begin. He expects investors could assign a higher multiple as they recognize the importance of memory chips to AI computing performance.
26 long-term agreements cover revenue through 2030
AI demand is not the only support for Luria's view. Micron has signed 26 multiyear agreements with customers that are expected to cover more than 35% of revenue through 2030. Those contracts could improve order visibility, but they do not eliminate the industry's exposure to swings in memory-chip prices and profit margins.
The valuation case still depends on the AI capital-spending cycle continuing. Prediction-market data put the probability of a downturn in the AI sector by December 31 at about 6%. The relevant contracts require three of six trigger conditions to be met within 90 days, including a 50% decline in Nvidia's closing share price from its historical high.
Whether Micron can approach the $3,000 target will therefore depend not only on the removal of buyback restrictions, but also on continued AI infrastructure investment, memory demand, customers' long-term purchasing commitments and sustained earnings growth. The stock's decline even after Samsung improved its profit outlook also shows that the market has not yet fully valued Micron as an AI-focused supplier.