Micron Target Slashed 17% to $425 as DDR5 Prices Drop 6%
Citi cut its Micron Technology price target by 17% to $425 after mainstream DDR5 16GB DRAM prices fell about 6% since its latest earnings report. The bank maintained its earnings forecasts and Buy rating, citing hyperscaler 3-5 year deals and rising AI-driven memory demand.
1. Citi Lowers Micron Price Target
Citi reduced its Micron price target from $510 to $425, reflecting a 17% cut driven by recent spot price weakness in the DRAM market.
2. DDR5 Spot Prices Slide
Mainstream DDR5 16GB DRAM prices have declined by roughly 6% since Micron’s last earnings release, pressuring near-term memory revenue.
3. Hyperscaler Deal Negotiations
Micron is in talks with hyperscalers for 3-5 year contracts featuring base volume commitments, pre-payments and quarterly pricing adjustments tied to market conditions.
4. AI Demand Supports Outlook
Despite near-term pricing pressure, Citi maintained a Buy rating, highlighting the structural growth in AI workloads and the importance of KV cache for complex model outputs.