BofA Sees Micron EPS Topping $230 by FY30

What happened

Bank of America analyst Vivek Arya reiterated a Buy rating on Micron and raised the price target from $1,250 to $1,550, implying nearly 50% upside from current levels. The firm projects Micron could generate $200 to $250 in earnings per share by fiscal 2030, with a midpoint above $230. This forecast is well above the consensus estimate of $160 to $170 for peak earnings. The bullish outlook follows SanDisk's recent investor day, where management outlined 15% annual sales growth and gross margins above 80% through fiscal 2030. BofA believes similar dynamics-strong AI-driven memory demand, customer commitments through multi-year supply agreements, and tighter supply discipline-could enable Micron to achieve a more durable profitability profile than in previous memory cycles. Micron's recent results underscore the AI boom: third-quarter fiscal 2026 revenue reached $41.46 billion, up 346% year-over-year, and EPS came in at $25.11, up 1,215% from the prior year.

Why it matters

Memory chip earnings have historically been highly cyclical. Micron earned $8.7 billion in fiscal 2022 but swung to a $5.8 billion loss in fiscal 2023 as revenue nearly halved and gross margin collapsed to negative 9%. A similar downturn occurred after fiscal 2018, when net income peaked at $14.1 billion and then fell 81% over two years. The key question for investors is whether this cycle will be different. If supply discipline holds and AI infrastructure demand remains robust, Micron could sustain higher margins and earnings for longer. However, if supply outpaces demand as it did in past cycles, the traditional boom-and-bust pattern could resume. BofA's thesis hinges on the belief that multi-year customer agreements and constrained industry capacity may structurally reduce cyclicality, justifying a higher valuation multiple than Micron has historically commanded.

Bigger picture

The memory industry has been notoriously cyclical, with prices and margins driven by the balance between supply and demand. Strong demand and tight supply push prices higher, attracting new capacity until oversupply drives prices back down. However, the current AI boom is of a different scale. Micron's revenue is now running near $90 billion annually, compared to $15.5 billion in fiscal 2023, and quarterly sales have reached more than four times year-ago levels. SanDisk's recent investor day highlighted the potential for a more durable phase, with the company projecting mid-to-high-teens revenue growth and 80% gross margins through fiscal 2030, supported by multi-year supply agreements with eight customers. If similar dynamics hold across the memory industry, the sector could see a longer and more stable upcycle than in the past. Still, the history of sharp downturns serves as a reminder of the risk if demand falters or supply discipline breaks down.

What to watch

Investors should monitor whether Micron and its peers maintain supply discipline and avoid overbuilding capacity as AI demand remains strong. Watch for updates on multi-year customer agreements and whether they provide the revenue visibility and pricing stability that BofA's bull case assumes. Quarterly earnings reports will reveal whether gross margins and profitability remain elevated or begin to compress as competitors add capacity. Any signs of slowing AI infrastructure spending or weakening memory pricing could signal a return to the traditional boom-and-bust cycle. Additionally, compare Micron's financial performance to SanDisk's projections to see if the durable-profit thesis holds across the industry.