Major Institution Ratings | DA Davidson: AI is Driving Memory into a Positive Cycle, Micron Target Price Raised to $1,000

Glonghui, May 12｜DA Davidson Managing Director Gil Luria pointed out that many investors are still stuck in the old perception of memory chips as a cyclical industry, which leads them to underestimate the new logic for the memory sector in the AI era. He noted that as AI models become increasingly large, the demand for memory is rapidly rising in order to support longer context windows—meaning the ability to process more data at once. This is further driving demand for efficient mechanisms such as key-value cache, which also require extensive memory support. Longer context windows improve model performance, which in turn encourages the development of even larger models, thus creating a continuous virtuous cycle. Compared with the currently hot CPU market fueled by the boom in agent-based AI and inference demand, Luria believes that the memory industry may even become a “better market” in the future. Investors will begin to rethink the punitive valuation frameworks previously applied to Micron, which could open up considerable upside. At the end of last month, Luria gave Micron a “Buy” rating for the first time, with a target price of $1,000—about 26% above Monday’s closing price.