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Investing.com -- Morgan Stanley raised its price targets for Micron and Sandisk, citing what it calls “intensifying shortages across the board” in memory markets and arguing that the recent selloff in semiconductor stocks “does not seem warranted.”
The firm lifted its target on Micron to $338 from $325 and on Sandisk to $273 from $263, while reiterating Overweight ratings and naming Micron its top pick.
Analyst Joseph Moore said memory conditions “continue to improve,” with the most severe tightness in DDR5 DRAM, where “there is an active sense of crisis that product is not available at any price.”
While consumer-grade NAND appears less strained, Morgan Stanley said it is still observing “a generational tightness across all areas.”
The note pushed back against concerns that higher capital spending or easing shortages could undercut the cycle.
The firm pointed to increased investment activity at Samsung and Hynix, along with what Micron has described as “upside pressure” to its own capital plans.
But Moore remarked that those developments need to be viewed in context: suppliers are facing “sold out market conditions in the face of accelerating cloud demand,” and current spending levels “do not seem likely to catch up to demand in the next few quarters.”
The analyst also dismissed suggestions of adequate supply from select PC makers, saying “the industry collectively does not have enough inventory,” and highlighting agreements that lock in “multiple quarters of significant price increases.”
On the competitive side, Morgan Stanley said Nvidia can likely pass through rising memory costs, while other chipmakers face far greater margin pressure.
The firm raised its CY26 EPS forecasts by 15 percent for Micron and 20 percent for Sandisk, arguing that tightening supply and strong AI-driven demand create a setup for “multiple upward revisions over the next few quarters.”