As investors brace for Micron Technology Inc.’s (NASDAQ:MU) earnings report, Futurum Group CEO Daniel Newman argues that artificial intelligence has fundamentally transformed the memory market, backing his firm’s $1,500 price target on the stock despite a sharp selloff on Tuesday.
AI Memory Demand Is Reshaping The Industry
On Tuesday, in a post on X, Newman shared a clip from his appearance on Yahoo Finance on which he said the era of memory as a commodity business is over, describing memory as “strategic” infrastructure in the AI economy.
Newman compared today’s memory market to the early stages of Nvidia Corp.’s (NASDAQ:NVDA) AI-driven rally, saying memory chips have become the “GPU of three years ago” due to supply constraints and surging demand.
According to Newman, the key question heading into Micron’s earnings is whether the company can continue delivering exceptionally strong profitability as demand for advanced AI memory remains elevated.
He noted that Micron and rivals Samsung Electronics (OTC:SSNLF) and SK hynix have benefited from limited supply and strong pricing power, allowing margins to expand significantly.
While some investors worry those conditions may not last, Newman said he sees no evidence that AI-related demand has weakened.
Micron Earnings Seen As A Major AI Market Test
Newman also pushed back on bearish interpretations of Micron’s investment and supply agreement with Anthropic, arguing the deal reflects confidence in future AI demand rather than concern about competitive positioning.
He said the market increasingly views memory as a critical component of AI infrastructure rather than a cyclical commodity business. As a result, some investors believe supply constraints could persist well into the next decade.
Separately, Newman highlighted a new Futurum Equities research note from analyst Rolf Bulk that maintained a Buy rating and a $1,500 price target on Micron, saying the firm is looking beyond the market’s Tuesday “carnage.”
BofA Securities also raised its price target on Micron to $1,500 from $950 while reiterating a Buy rating.
Micron shares fell 13.18% to close at $1,051.77 on Tuesday and rebounded by 1.26% in after-hours trading to $1,065, according to Benzinga Pro.
The company’s shares have surged 233.45% year to date and are up 722.27% over the past 12 months.
AI Spending Outlook Remains Key
Newman tied his bullish outlook to expected growth in AI infrastructure spending.
He pointed to forecasts calling for trillions of dollars in AI-related capital expenditures over the coming years, with memory expected to capture an increasingly large share of those investments.
Micron Drives AI Market Sentiment?
Separately, market commentator The Kobeissi Letter pointed to the growing concentration of gains in AI-related stocks, noting that momentum-focused investments have significantly outperformed the broader market.
“Tomorrow’s Micron earnings release, $MU, now feel a lot like Nvidia earnings days in 2023 and 2024,” the commentator wrote on X.
The firm said Micron, along with other semiconductor companies like Intel Corp (NASDAQ:INTC) and Advanced Micro Devices, Inc. (NASDAQ:AMD), has become a key beneficiary of that trend, warning that elevated leverage and crowded positioning can amplify both gains and losses around major catalysts such as earnings reports.
Micron Looks To Extend Beat Streak
Analysts expect Micron to post third-quarter revenue of $35.01 billion, compared with $9.3 billion a year earlier.
The memory-chip maker has exceeded revenue estimates in each of the last five quarters and in nine of the past 10.
Wall Street also expects earnings of $20.20 per share, up from $1.91 in the year-ago quarter, with Micron having surpassed EPS expectations for nine consecutive quarters.
Benzinga Edge Rankings place Micron in the 99th percentile for Momentum, highlighting strong gains across short, medium and long-term periods.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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