Mizuho Securities has raised its price targets for Micron Technology (MU) and Western Digital (WDC), reflecting a bullish outlook on the memory and storage sector fueled by artificial intelligence (AI). The firm lifted Micron's target to $740 from $545 and Western Digital's to $550 from $470, maintaining a positive stance on these names along with SanDisk.
The upgrade comes as investors increasingly view memory as a critical bottleneck in the AI ramp-up, rather than just another cyclical chip segment. AI inference, which involves running models after training, requires fast memory located close to processors. Additionally, the rise of agentic AI—software that can operate and plan with minimal human guidance—is expected to drive further demand for DRAM, NAND, and high-bandwidth memory (HBM).
Micron shares traded at $666.59 before the bell, up 4.2% from the previous close. Western Digital gained 3.8% to $483.15. SanDisk hovered near flat at $1,409.98, while Seagate advanced 2.0% to $786.42.
Analyst Vijay Rakesh of Mizuho highlighted that agentic AI is fueling stronger memory demand. He raised Micron's revenue outlook for fiscal 2026, 2027, and 2028 to $109 billion, $181 billion, and $179 billion, respectively. His new earnings per share (EPS) forecasts for those years are $58.16, $104.74, and $94.40.
High-bandwidth memory (HBM), crucial for AI accelerators due to its faster data movement, is a standout driver. Rakesh projects Micron's HBM revenue at $19.1 billion for fiscal 2026, $30.7 billion for 2027, and $35.7 billion in 2028. He expects the total HBM market to grow at a 40% compound annual growth rate, surpassing $100 billion by 2028.
Flash-memory stocks also saw a boost. Rakesh raised SanDisk's price target to $1,625 from $1,220, citing demand outpacing supply in NAND flash memory, which powers solid-state drives, smartphones, and data-center storage.
Western Digital announced a capital-structure move this week, exchanging 1,865,801 of its own common shares for 653,203 SanDisk shares. The exchange is expected to settle on May 7, after which Western Digital will still hold 1,038,681 SanDisk shares.
Micron also provided new proof points for its storage offerings. On May 5, the company began shipping the 245-terabyte Micron 6600 ION data-center SSD, touted as the world's highest-capacity solid-state drive. The device targets AI, cloud, enterprise, and hyperscale use cases. According to Jeremy Werner, head of Micron's Core Data Center Business Unit, AI workloads are driving massive growth in shared data. IDC's Jeff Janukowicz noted that rapid AI dataset growth is shifting storage economics toward rack-level efficiency. Micron claims the new 245TB SSD requires 82% fewer racks to match the raw storage capacity of hard disk drives, drawing up to 30 watts at peak.
Despite the rally, the margin for error has narrowed. The Wall Street average price target for Micron stands at $581.89, now trailing the stock's current price. Western Digital has flagged headwinds including tariffs, demand swings, supply chain constraints, debt, and competitive moves that could affect results.
Mizuho's thesis is clear: AI is not just about processors—it is also about memory and storage. Companies that can deliver limited-supply chips and drives are well-positioned to benefit as data-center clients continue expanding through 2027.
