Micron shares rise Tuesday on chip cycle and AI investment support

Micron Technology shares rose in Tuesday's premarket trading, supported by a broader positive market sentiment. Nasdaq futures gained 0.92%, while S&P 500 futures rose 0.46%.

Micron also received support from a strong memory market cycle. Gartner expects sustained AI infrastructure investment and stronger memory prices to drive exceptional growth in the semiconductor industry.

Gartner expects semiconductor revenue to approach $1.6 trillion

Gartner projects global semiconductor revenue will jump 92% from $809 billion in 2025 to approximately $1.6 trillion in 2026, then reach about $1.9 trillion in 2027.

Director analyst Ben Lee said Monday that sustained AI infrastructure investment and stronger-than-expected memory prices are accelerating industry growth. Gartner expects AI data centers to account for 36.5% of semiconductor revenue in 2026, exceeding 53% by 2030.

Memory boom puts Micron and rivals in the spotlight

Gartner forecasts memory revenue will surge from $220.1 billion in 2025 to $837.3 billion in 2026, surpassing $1 trillion in 2027. Memory could account for 54% of total semiconductor revenue this year, well above 27% in 2025.

The company expects DRAM revenue to grow 246.6% in 2026, while NAND flash revenue could rise 371.9%.

This outlook puts Micron, Samsung Electronics, and SK Hynix in focus. These companies dominate global DRAM and NAND production.

Technical analysis

Micron remains above key short-term trend indicators. The stock trades about 3.8% above its 20-day simple moving average of $896.75. It also sits near its 20-day exponential moving average of $926.76.

However, the medium-term trend is mixed. Micron trades about 3.4% below its 50-day SMA of $962.88. Still, it remains well above its 100-day and 200-day averages, preserving the long-term uptrend.

The relative strength index stands at 48.54, indicating neutral momentum. This suggests the stock is consolidating rather than approaching overbought or oversold territory.

Meanwhile, the 20-day SMA remains below the 50-day SMA, a short-term bearish signal. However, the 50-day SMA remains above the 200-day SMA, supporting the long-term bullish trend.

Key resistance sits at $1,012. A breakout above this level could signal fresh buying momentum. Support is near $891.50, close to the 20-day SMA.

Earnings and analyst outlook

Micron's next major catalyst could come with its earnings report, expected around September 22.

Analysts expect earnings per share of $31.26, up from $3.03 a year ago. They project revenue of $507.8 billion, compared with $113.1 billion last year. Micron's price-to-earnings ratio stands at 20.6x.

The stock holds a consensus Buy rating. The average analyst price target is $1,525.

New Street Research upgraded Micron to Buy on August 14 with a $1,250 price target. Citi maintained a Buy rating on August 7 but cut its target to $1,150. KeyBanc maintained an Overweight rating on July 14 and raised its target to $1,750.

Top ETF exposure

iShares Semiconductor ETF: 7.98% weight
Invesco S&P 500 Momentum ETF: 9.81% weight
Invesco PHLX Semiconductor ETF: 7.82% weight

Significance: Given MU's heavy weighting in these funds, any significant inflows or outflows in these ETFs could trigger automatic buying or selling of the stock.

Price action

MU stock activity: Micron shares rose 2.03% in Tuesday's premarket trading to $928.80.