• BofA reiterates Buy rating on Micron with a $1,550 price target, citing the recent selloff as an enhanced buying opportunity.
  • The bank expects memory pricing to normalize in 2027–2028 but sees strong AI-driven demand supporting fundamentals.
  • BofA forecasts FY2028 EPS of ~$150 in a bull case, with a bear case still well above prior cycle peaks.

A 'Buy the Dip' Call

Bank of America is doubling down on Micron Technology (MU) (MU), reiterating its Buy rating and $1,550 price target after the stock's recent pullback. In a note to clients, the bank described the selloff as an "enhanced buying opportunity," citing robust AI memory demand and a favorable pricing environment. This bullish stance comes even as memory prices are expected to normalize in the 2027–2028 timeframe, according to analysts.

BofA's confidence is rooted in the belief that AI infrastructure spending—projected to reach $1.5 trillion by 2027—will continue to fuel demand for DRAM and NAND flash, key products for Micron. The bank's updated forecasts see FY2028 earnings per share of around $150 in a bull case, with a bear case of ~$100. Both figures vastly exceed the prior cycle peak of ~$12, underscoring the potential upside.

Competitive Landscape

Addressing concerns about Chinese competitor CXMT, BofA analysts assert that CXMT is "not a threat in AI" memory, as its technology lags in the high-bandwidth segments crucial for AI accelerators. This positions Micron to capture significant market share in the AI-driven memory market.

The bank's note is part of a broader pattern of upward revisions to Micron's price target and earnings outlook, reflecting growing optimism around AI's impact on the semiconductor cycle. While some investors may be wary of the stock's volatility, BofA's stance offers a counterpoint, suggesting that the recent dip is a chance to buy into a company with strong fundamentals.

Market Implications

Micron's stock has been subject to the broader market's swings, but the underlying demand environment remains robust. With AI memory demand strong and supply constraints expected to persist until 2027, the company could be poised for outsized earnings growth. As BofA notes, "strong AI memory demand should continue supporting pricing," making the current valuation attractive for long-term investors.

In the short term, the stock may trade within a range as investors digest the news, but the bank's conviction provides a clear signal: the pullback is a window, not a warning.