Morgan Stanley has sharply lifted its price targets for two major memory suppliers, more than doubling its projection for Micron Technology and raising its target for SanDisk Corporation by a substantial margin as supply remains tight across the memory sector.
New price targets - The firm increased its target for Micron to $1,050 from $520, and bumped SanDisk's target to $1,750 from $1,100. The adjustments reflect what Morgan Stanley describes as demand that continues to outstrip available memory supply, with no immediate easing expected.
DRAM as a bottleneck - In a note to investors, analyst Joseph Moore identified DRAM as the main constraint in the buildout of AI infrastructure. He said hyperscale customers continue to demonstrate a willingness to pay elevated prices to secure capacity, intensifying pricing power for suppliers.
Moore cautioned that there is "no quick fix to the memory shortage," and warned that supply constraints could remain in place for two to three more years or potentially longer.
Financial forecast revisions - Morgan Stanley raised its calendar-year 2026 and 2027 EPS estimates for Micron by 4% and 48%, respectively, largely reflecting stronger pricing assumptions. The firm now models DRAM pricing rising 40% in the May quarter and a further 15% in August.
For SanDisk, the firm increased CY26 and CY27 EPS projections by 12% and 24% respectively, again driven by a view of firmer pricing across the memory market.
Valuation and upside - Despite recent strong share-price performance for both companies, Morgan Stanley sees additional upside. The note points out that both Micron and SanDisk trade below 10x forward price-to-earnings on CY27 estimates, indicating potential for multiple expansion.
Moore wrote, "We don't think the run of strong performance is over," signaling that the firm expects the favorable industry dynamics to continue benefiting these names.
Upcoming catalysts for Micron - The firm highlighted several events that could act as catalysts for Micron's stock, including high-bandwidth memory (HBM) contract renegotiations slated for late 2026 and the anticipated start of share buybacks in fiscal 2027. Morgan Stanley models $50 billion in repurchases across fiscal years 2027-2028. The note also noted that Micron had been largely restricted from buybacks due to provisions of the CHIPS Act.
Context for markets - The firm's analysis underscores the continued imbalance between memory demand - particularly from AI infrastructure deployment - and available supply. That imbalance is reflected in the material upward revisions to both pricing and earnings assumptions for suppliers, and in Morgan Stanley's materially higher price targets for Micron and SanDisk.