Citigroup & Micron Earnings Preview: AI Memory Price Hike Cycle to Focus on Earnings Call

According to Mars Finance, Micron Technology will release its quarterly results ending in May on June 23. Citigroup anticipates that investors will focus not only on whether quarterly revenue and profit exceed expectations, but also on how management describes the supply and demand outlook for DRAM, NAND, and HBM. Citigroup maintains its "Buy" rating on Micron in its report and raises its target price from $840 to $1200. The bank believes that stronger-than-expected memory prices since the beginning of the year are significantly boosting Micron's profitability over the next two years. Citigroup expects Micron's earnings per share to reach $60.73 in fiscal year 2026 and further rise to $114.73 in fiscal year 2027. The core of this earnings forecast is whether the memory price increase cycle can continue. Citigroup predicts that the average selling price of DRAM will increase by 200% and the average selling price of NAND will increase by 186% in 2026. The report states that DRAM spot prices have risen 52% since the beginning of the year, 22% since early April, and are approximately 21% higher than contract prices, suggesting that contract prices may continue to rise. AI server demand remains the main theme of Micron's financial statements. Citi expects that data center demand, accelerated token growth, and supply constraints will result in a global DRAM market experiencing a supply shortage of approximately 5% in 2026. The bank also believes that HBM prices still have room to rise next year, a key variable supporting Micron's 2027 earnings forecast. Therefore, Citi expects investors to focus on three key questions during the earnings call: first, management's latest assessment of DRAM and NAND supply and demand in 2026 and 2027; second, whether long-term supply agreements can improve the visibility of future revenue and profits; and third, whether the current high gross margin can be maintained. Citi currently projects Micron's gross margins to reach 76.9% and 82.9% in fiscal years 2026 and 2027, respectively. Citigroup's baseline scenario corresponds to a target price of $1200; in an optimistic scenario, if DRAM prices and product mix continue to improve, HBM yields are better than expected, and supply expansion in 2027 is limited, the stock price could reach $1400. In a pessimistic scenario, if DRAM prices fall more than expected, or if industry capital expenditures increase significantly leading to oversupply, the stock price could fall back to $400. In other words, the key to this earnings report is not just whether Micron can deliver strong quarterly figures, but whether the company can convince the market that the memory demand driven by AI is sufficient to mitigate the industry's past cyclical fluctuations. For a stock that has already risen significantly, management's statements regarding long-term contracts, HBM supply, and price sustainability may be more important than the quarterly results themselves.