Citi Micron Earnings Preview: AI Memory Boom Cycle to Take Center Stage in Earnings Call

BlockBeats News, June 23rd, Micron Technology is about to announce its quarterly performance ending in May. Citigroup expects that investors' focus will not only be on whether the quarterly revenue and profit exceed expectations but also on how the management describes the supply and demand outlook for DRAM, NAND, and HBM.

Citigroup maintains a "Buy" rating on Micron in the report and has raised the target price from $840 to $1200. The bank believes that memory prices have been stronger than expected since the beginning of the year, significantly boosting Micron's profitability over the next two years. Citigroup expects Micron's EPS to reach $60.73 in the 2026 fiscal year, further increasing to $114.73 in 2027.

The core of this earnings preview is whether the memory price hike cycle can continue. Citigroup expects the average selling price of DRAM to rise by 200% in 2026, and the average selling price of NAND to rise by 186%. The report states that DRAM spot prices have risen by 52% since the beginning of the year, up 22% since early April, and about 21% higher than contract prices, indicating that contract prices may continue to rise in the future.

The demand for AI servers remains the main theme of Micron's earnings narrative. Citigroup expects that data center demand, accelerated token growth, and supply constraints will put the global DRAM market in a roughly 5% supply shortage in 2026. The bank also believes that HBM prices still have room to rise next year, which is a key variable supporting Micron's profit expectations for 2027.

Therefore, Citigroup expects investors to focus on three key questions during the earnings conference call: First, the management's latest assessment of DRAM and NAND supply and demand in 2026 and 2027; second, whether long-term supply agreements can enhance visibility into future revenue and profit; and third, whether the current high gross margin can be maintained. Citigroup currently expects Micron's gross margins for the 2026 and 2027 fiscal years to reach 76.9% and 82.9%, respectively.

Citigroup's base case corresponds to a target price of $1200; in an optimistic scenario, if DRAM prices and product mix continue to improve, HBM yields exceed expectations, and 2027 supply expansion is limited, the stock price could reach $1400. In a pessimistic scenario, if DRAM prices fall more than expected or if industry capital expenditures increase significantly, leading to oversupply, the stock price could fall to $400.

In other words, the key to this earnings report is not only whether Micron can deliver strong quarterly numbers but also whether the company can convince the market that the memory demand driven by AI is sufficient to mitigate the industry's historical cyclicality. For a stock price that has already risen significantly, the management's depiction of long-term agreements, HBM supply, and price sustainability may be more important than the quarterly performance itself.