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Micron stock (MU) investors have already been rewarded handsomely this year. The harder question now is whether AI has fundamentally changed the business enough to keep those gains from looking like another peak in a familiar memory cycle.

That’s a massive question. If demand remains tight for years rather than quarters, and Micron can lock more business into long-term agreements, the company could start to look less like a volatile commodity producer and more like a business with durable earnings power.

Veteran D.A. Davidson analyst Gil Luria believes the market is still underestimating that shift, as reported by TheFly.

“Micron is on a growth trajectory for the next 3-5 years, which is what the market has not yet acknowledged,” he said.

His thesis rests on a simple shift in AI economics, as he expects a major demand-supply imbalance while raising a bigger question for investors: whether Micron’s earnings should still be valued as temporary.

D.A. Davidson sees a 3-5 year Micron growth story

Luria argues that AI has effectively transformed memory from a highly cyclical commodity into a “mission-critical” component of AI infrastructure.

Consequently, Luria bumped his Micron price target to $3,000 from $2,100 while reiterating a Buy rating, pointing to roughly 187% upside as per the latest closing price.

He believes Micron is on a three- to five-year growth trajectory that investors haven’t fully incorporated into the stock’s valuation and expects memory demand to outstrip supply through both 2027 and 2028.

According to him, “early in their journey of understanding MU’s value,” arguing that this process should ultimately result in a materially higher earnings multiple.

Read more: Morgan Stanley revisits Micron stock price target amid stellar growth

To break things down, Micron’s thesis is basically straightforward, where more capable AI systems need enormous quantities of fast memory.

Luria’s note argues that additional memory can enable larger context windows, faster processing, and better AI performance. That changes the economics of memory because GPUs and custom accelerators aren’t particularly useful if the systems around them cannot feed those processors data quickly enough.

Micron itself has been making essentially the same argument.

Reuters reported that its president and COO, Manish Bhatia, recently described memory as “the chief constraint in AI” as data centers become the world’s largest market for memory and storage.

Moreover, Micron expects memory supply-and-demand conditions to become even tighter in fiscal 2027 and 2028 than in 2026, as reported by TrendForce.

Also, the numbers behind Luria’s thesis are substantial. 

Micron’s fiscal Q4 sales jumped to $54.23 billion from $11.32 billion a year earlier, while adjusted EPS reached $33.42. Full-year fiscal 2026 revenue hit $133.19 billion, with adjusted EPS of $75.52. 

Management also guided to about $61.5 billion in first-quarter revenue, above Wall Street’s $57.02 billion consensus. More importantly, long-term supply commitments rose to $32 billion from $22 billion, while remaining performance obligations climbed to roughly $150 billion from $100 billion. 

That backs up Luria’s view that longer-term contracts could make Micron’s historically cyclical business more predictable. Even “de-specing” may not be bearish if using less memory ultimately hurts AI performance and pushes customers to buy more later.

Micron’s biggest AI opportunity may also be its biggest risk

What stands out to me is how quickly AI is turning memory from a supporting component into a major infrastructure cost. 

Bank of America estimates that memory now accounts for roughly 35% of AI infrastructure spending, giving Micron a much larger share of every dollar flowing into AI data centers. 

That said, the opportunity comes with an obvious risk: If memory prices climb too far, customers could reduce specifications or slow purchases. Yet BofA has become more bullish, and, as I covered following Micron’s latest results, the firm raised its fiscal 2027 revenue estimate to $275.4 billion from $230.3 billion.

More Micron:

Michael Burry increases his bet against popular chip giant

Bank of America doubles down on Micron stock after AI bombshell

Micron stock jumps as investors look beyond GPUs in AI chip trade

BofA also increased its fiscal 2028 estimate to $317 billion from $244.1 billion. Its EPS estimates jumped to $171.78 and $197.90, respectively.

I think the more revealing comparison is the pricing setup. 

D.A. Davidson’s $3,000 target values Micron at roughly 19 times fiscal 2027 earnings, implying about $158 per share. BofA actually forecasts higher earnings at $171.78, yet carries a much lower $1,550 target. 

That tells me the debate is increasingly about what Micron’s earnings are worth. With 26 strategic customer agreements and more than 75% of fiscal 2027 output already committed, Micron may be becoming less cyclical. The question is whether that change is durable enough to justify a permanently higher multiple.

D.A. Davidson sees years of AI-driven growth ahead for Micron Technology shares.Bloomberg / Getty Images

Micron looks cheap on earnings, but the market still doubts the cycle

There’s little you can take away from or question about Micron from an AI-demand standpoint. The real question is whether its earnings visibility has improved enough to justify paying something closer to a broader-market multiple for profits investors have historically treated as temporary. 

That tension shows up in the valuation data. 

Seeking Alpha lists Micron at just 5.94 times forward non-GAAP earnings, compared to a 23.74 times sector median, which is unusually inexpensive.

Still, I would not call the stock cheap based on those multiples alone. Memory companies often look cheapest near cyclical peaks, and Micron’s forward enterprise value to sales multiple of 4.05 times is actually above the sector median of 3.63 times.

Luria clearly thinks this cycle is different.

If AI demand, long-term supply agreements, and tighter memory markets make earnings more durable, then the multiple itself may need to reset higher.

If Micron’s current trajectory really lasts another three to five years, I feel that the $3,000 target is not just a bet on another memory-price spike. It is a bet that Wall Street will eventually stop valuing Micron as it did in the previous cycle.

Related: Nvidia stock flashes massive signal as Wall Street leans in

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Related: Walmart’s $54 cushioned 3-piece patio set is perfect for small spaces

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Details to know

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Colors: Four. 

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Shop more deals 

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Alabama coach Kalen DeBoer praised redshirt freshman quarterback Keelon Russell ahead of Saturday’s SEC heavyweight matchup against No. 2 Georgia. Both teams are 5-0.

The Green Bay Packers and Chicago Bears meet Sunday at noon at Lambeau Field.

U.S. short-term yields now offer an unusually large advantage over much of Asia.

Bank of America estimates that the GDP-weighted two-year yield across emerging Asia is 174 basis points, or 1.74 percentage points, below the two-year U.S. Treasury yield, according to a note shared with TheStreet. A broader bond-market measure also puts Asia’s yield discount to Treasuries at its widest in more than 20 years.

That kind of gap would normally favor the dollar. But BofA said lower-yielding currencies, including the South Korean won, Chinese yuan, and Singapore dollar, have held up better in 2026 than higher-yielding currencies such as the Indian rupee, Indonesian rupiah, and Philippine peso.

The bank sees another set of flows pulling the region apart: North Asian exporters are bringing in dollars from booming technology shipments. At the same time, oil importers need more dollars to pay energy bills as Brent trades above $100 a barrel.

Brent remained above $100 on Wednesday, Oct. 7, as investors weighed threats to global supply.

Also read: ‘Bond King’ issues stunning warning to stock market investors

Why a 20-year yield gap isn’t sinking all Asian currencies

Higher U.S. interest rates still give investors an incentive to hold dollar assets.

But BofA says bond yields are no longer the only force driving currencies. Cross-border equity flows, investors’ currency hedges, and exporters converting dollar revenue back into local currencies are playing a bigger role.

BofA also says some of the extra yield offered by developed-market bonds reflects higher fiscal and inflation risk.

The export effect is particularly visible in South Korea and Taiwan, where technology shipments have surged.

South Korea’s chip exports have surged.Cheunghyo / Getty Images

Chip exports are giving Korea and Taiwan an FX cushion

South Korea exported a record $120.9 billion of goods in September, up 83.5% from a year earlier, Reuters confirmed.

Semiconductor shipments rose 262.8% to $60.3 billion as AI infrastructure spending fueled memory demand and chip prices.

Those exports generate dollar revenue. When Korean companies convert part of those earnings into won, they sell dollars and buy the local currency, helping support the won.

More Bank of America:

Bank of America sends sharp August stock market warning

Bank of America CEO warns inflation will back Fed into a corner

Bank of America just made a strong call on inflation, economy

Taiwan has a similar source of support.

BofA said Taiwan’s current-account surplus reached about 24% of GDP in the second quarter, and the bank expects higher prices for technology exports to keep supporting export revenue.

Taiwan’s September consumer prices, released on Oct. 7, added another piece to BofA’s argument. CPI increased 2.73% from a year earlier, above Taiwan’s 2% policy rate.

BofA states that stronger inflation gives Taiwan’s policymakers more reason to tolerate currency appreciation, because a stronger Taiwan dollar can lower the local cost of imported goods.

The bank therefore suggests shorting offshore yuan and long Taiwan dollar trade.

But it doesn’t mean that the yuan must fall against the U.S. dollar. China still faces a softer inflation backdrop, and Taiwan is receiving more support from strong technology exports and a large current-account surplus.

Oil above $100 squeezes Thailand, the Philippines, and India

Energy importers face the other side of the dollar flow.

Higher crude prices force countries that buy oil from abroad to spend more dollars on the same fuel. The added cost can also push domestic inflation higher.

The latest data show that pressure clearly:

Philippines: September inflation reached 7.2%, compared with a 5% central-bank policy rate.

Thailand: September inflation reached 2.82%, compared with a 1% policy rate.

Philippine inflation accelerated from 6.1% in August. Transport prices rose 14.6%, and housing, water, electricity, gas, and other fuels increased 8.4%.

Thailand’s inflation increase was driven partly by higher fuel and food prices.

That leaves policy rates below inflation in both countries. On BofA’s measure, real policy rates are about -2.2% in the Philippines and -1.8% in Thailand, reducing the interest-rate cushion for their currencies.

India raised rates on Oct. 7 as higher oil prices added to inflation and pressure on the rupee.

The Reserve Bank of India increased its repo rate by 25 basis points to 5.5%, its first hike in nearly four years, and shifted its policy stance toward calibrated tightening.

The rupee still fell to 96.845 per dollar, close to its record low of 96.96. High oil prices, foreign portfolio outflows, and elevated global rates have continued to pressure the currency, despite RBI intervention.

BofA prefers to be short the Thai baht against a basket of the Indian rupee and Malaysian ringgit.

The bank expects India’s rate increases to provide the rupee with some support, while Malaysia’s status as a net energy exporter gives the ringgit more protection from expensive oil.

Taiwan’s September export figures are due on Oct. 8. Another strong report would add evidence that technology shipments continue to bring dollars into the economy.

For oil importers, Brent staying above $100 would keep pushing in the opposite direction.

The next test is whether export dollars can keep supporting North Asian currencies as high U.S. yields draw capital toward the dollar and expensive oil increases dollar demand among the region’s importers.

Related: Scott Bessent sends clear signal to bond market investors

Every time gas prices spike, I see the same natural reaction. We go through long stretches where fuel prices just mosey along, and then a huge spike hits like the one we’re experiencing now. You stand at the pump, watch the register spin, and say, “I can’t believe it just cost me this much to fill up!” There’s nothing fun about watching the dollars fly by while the gallons crawl as you fill up your vehicle.

Naturally, it leads to a knee-jerk reaction: “I’ve got to get rid of this gas-guzzler and buy something more fuel-efficient.”

Yes, I love driving efficient vehicles, but trading in your car right now as a knee-jerk response is a classic money trap. Here is why making that switch could cost you far more than you think — plus how to defeat the new tactics automakers are using to keep car prices high.

The Math Behind the Gas Spike: Why You Shouldn’t Rush to Trade In

Unless a completely unexpected global event happens, high gasoline prices are typically temporary. While today’s brutal prices are painful for your wallet, history shows us this is not a permanent state of affairs.

Here is where the math goes wrong for most people:

Trading in a working car creates new debt: If you ditch a paid-off vehicle (or one with a manageable low payment) to buy a hybrid or electric vehicle, your cost per mile will drop significantly. However, you are taking on a brand-new monthly car payment.

Fuel savings rarely offset a monthly payment: Unless you have an ultra-long daily commute, saving $50 to $100 a month on gas does not justify taking on a $400, $500, or $600 monthly car payment.

The takeaway: Keep driving what you have! Use smart strategies — like shopping around for the lowest local fuel prices — to cushion the impact at the pump until prices stabilize.

Final Thoughts

Gas-pump spikes are brutal, but making a major financial change based on a temporary crisis is almost always a mistake. Stick with the vehicle you have, cut costs wherever you can, and wait out the storm.

If you do have to buy, stick to the process and force dealers to compete — you can still beat them at their own game.
The post Should You Buy a New Car Because of Gas Prices? appeared first on Clark Howard.