Memory is “strategic infrastructure” for AI, Micron CEO Sanjay Mehrotra said.
- Micron announced a new research facility with a $10 billion outlay on Thursday.
- In July, the company outlined plans to invest more than $250 billion in U.S. manufacturing, research, and development.
- BMO Capital Markets initiated coverage on MU with an Outperform rating and a $1,300 price target.
Micron CEO Sanjay Mehrotra said Thursday that memory chips are becoming increasingly crucial to the AI value chain, serving as a key component without which AI models would struggle to scale.
Mehrotra made the comments in an interview with CNBC just after Micron announced a new research facility. The memory chipmaker will invest $10 billion to set up Micron Research Labs in the company’s hometown of Boise, Idaho.
“Memory is no longer a component in a system; memory is the strategic infrastructure for AI,” Mehrotra said in the interview with CNBC’s Jim Cramer.
“Without memory, you cannot make AI smarter or faster, without memory you can’t scale up AI. AI is advancing and a lot of context is getting generated. All of that content has to be stored, has to be processed through memory,” he said.
MU stock gained 4% on Thursday and was up 0.3% in the overnight session.
Micron Research Push Adds To $250B US Buildout
The $10 billion research commitment is part of Micron’s broader effort to expand its U.S. footprint. In July, the company outlined plans to invest more than $250 billion in U.S. manufacturing, research, and development.
The research institution will focus on critical memory technologies, advanced memory and compute architectures, advanced packaging and future semiconductor manufacturing.
The initiative drew support from some of Micron’s biggest customers and partners, including Nvidia CEO Jensen Huang and Apple CEO Tim Cook. According to Huang, memory reinvention is “one of the great challenges of the AI era. He stated that Micron is helping “drive the breakthroughs that will define the next era of AI and computing.”
Meanwhile, Commerce Secretary Howard Lutnick described the initiative as “the first dedicated Memory Research Lab” in the U.S. and said it would help ensure that memory technology does not become a constraint on innovation.
Retail, Analyst View On MU
On Stocktwits, the retail sentiment for MU remained ‘bearish.’ However, many traders remained upbeat over the long-term prospects. “$MU trading at just 5-6 times forward earnings, Micron is a no-brainer buy right now,” said a trader.
“Micron’s earnings are conservatively expected to jump by 111% in fiscal 2027 (which begins later this month) to $154.89 per share. Assuming Micron trades at even 15 times earnings after a year, which is a significant discount to the Nasdaq-100 index’s forward earnings multiple of 26, its stock price could reach $2,323,” they said.
Meanwhile, BMO Capital Markets initiated coverage on MU stock with an Outperform rating and $1,300 price target, which implies a 33% upside from the stock’s last close.
BMO sees Micron benefiting from a “prolonged memory supercycle,” driven by constrained supply and “exceptionally strong” demand, with growth across all product lines.
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