Is Barclays betting on a bigger breakout in Micron and SanDisk?

Barclays has made another big call on the memory-chip trade, raising its price targets on both Micron Technology and SanDisk as artificial intelligence keeps reshaping demand for DRAM and NAND chips.

The move comes just after Micron crossed the $1 trillion market-value mark on Tuesday, a milestone that shows how quickly the memory cycle has turned into one of Wall Street’s biggest AI trades.

The latest Barclays call is especially striking in Micron’s case. Analyst Tom O’Malley has taken the target from $275 in December to $450 in January, $675 in March, and now $1,175.

That is not a routine model tweak. It is a bet that the memory boom is becoming more durable than investors once assumed.

Numbers that keep getting bigger

Barclays lifted Micron’s target to $275 in December, then to $450 in January, and then to $675 after the company’s fiscal second-quarter results.

On Wednesday, it raised the target again to $1,175 while keeping an Overweight rating.

The firm cited Micron’s five-year Strategic Customer Agreement, saying the shift from traditional shorter contracts to multi-year volume commitments improves visibility in a historically cyclical business.

Micron’s results gave Barclays plenty to work with.

The company reported fiscal second-quarter revenue of US$23.9 billion (approx. $33.3 billion) and non-GAAP earnings of $12.20 a share, compared with revenue of US$8.1 billion (approx. $11.2 billion) and EPS of $1.56 a year earlier.

Micron also guided for fiscal third-quarter revenue of about US$33.5 billion (approx. $46.7 billion) and non-GAAP EPS of $19.15.

SanDisk has followed a similar path, though with even sharper stock gains.

Barclays first lifted its target to $750 from $385 in February while keeping an Equal Weight rating.

It has now upgraded the stock to Overweight and raised the target to $2,300 from $1,200, citing SanDisk’s more aggressive contracting model and stronger revenue visibility.

AI is eating memory, and supply cannot keep up

The simple reason behind the upgrades is that AI data centres need far more memory than older computing systems.

Graphics processors get most of the attention, but they cannot perform at full speed without fast memory and storage around them.

Gartner now expects DRAM prices to rise 125% in 2026 and NAND flash prices to rise 234%, with meaningful pricing relief unlikely before late 2027.

It also expects global semiconductor revenue to exceed US$1.3 trillion (approx. $1.8 trillion) this year, helped by what it calls “memflation.”

TrendForce is similarly bullish as it expects the global memory market to reach US$551.6 billion (approx. $768.9 billion) in 2026 and US$842.7 billion (approx. $1.2 trillion) in 2027, as AI systems require more high-bandwidth DRAM and faster NAND storage.

Conviction or caution?

Micron now trades near $895, after an 832% one-year rally, and as per market data, the stock appears overvalued relative to fair value.

SanDisk trades near $1,590 after a one-year gain of more than 4,000%, which is why even bullish upgrades need to be read carefully.

Barclays is not alone, however. UBS raised its Micron target to $1,625 from $535 this week, the highest among 46 brokerages covering the stock, citing AI demand and long-term supply agreements.

The supply side also supports the bull case.

SK Group Chairman Chey Tae-won has warned that wafer shortages could last until 2030, because HBM production consumes large amounts of wafer capacity and new supply takes years to ramp.