MU Stock Slips Ahead Of Earnings, Baird Hikes Price Target On 'Surge In Agentic AI Demand'

Baird analyst Tristan Gerra said rising agentic AI demand could increase demand for server CPUs and support memory demand.

• Baird expects industrywide DRAM supply growth to slow next year, potentially keeping the memory market tight.
• Gerra also expects Micron to benefit from higher high-bandwidth memory margins in 2027.
• Micron is scheduled to report fiscal fourth-quarter results after the market closes Wednesday, Sept. 30.

Micron (MU) stock dropped in early morning trade on Monday despite a price target hike from Baird ahead of the company’s fourth quarter results on Wednesday. 

Baird raised its price target on MU’s stock to $1,520 from $1,280 and kept an ‘Outperform’ rating on the shares. The new price target implies an upside of 40% from Friday’s close.

However, MU stock dropped over 2% in pre-market trade amid broader market weakness, in which tech stocks were leading the slide, after OpenAI paused training of its most capable models.

Baird Sees Agentic AI Boosting Memory Demand

Analyst Tristan Gerra gave three reasons for the increase, as per a note to investors cited by CNBC. 

First, Gerra said demand for agentic AI has increased recently, supporting demand for server CPUs. Baird expects that trend to continue into next year as AI workloads increasingly involve systems that can perform tasks and run processes with less human intervention.

Gerra also expects industrywide DRAM supply growth to slow next year compared with 2026. That could keep the memory market tight and support pricing.

The analyst expects Micron to benefit from higher margins on high-bandwidth memory in 2027 and said the firm is "incrementally positive" on the company over the near and medium term.

Micron Heads Into Earnings With AI Demand In Focus

The note comes after a broader rally in CPU-linked stocks tied to expectations that agentic AI workloads could require more computing capacity. 

Last week, Meta’s (META) Muse AI agent topped Apple’s (AAPL) App Store, helping fuel a rally in Meta and several semiconductor stocks. Advanced Micro Devices (AMD), Arm Holdings (ARM) and Intel (INTC) also gained, with investors looking at the potential increase in CPU demand from AI agents.

Micron is scheduled to report its fourth quarter (Q4) after Wednesday's close. It guided fiscal fourth-quarter revenue of $49 billion to $51 billion and non-GAAP earnings per share (EPS) of $30 to $32 a share.

As per Koyfin data, Wall Street expects the company to report EPS of $31.59, up more than 900% from a year earlier, on revenue of $51.24 billion, an increase of more than 350%.

How Is Retail Feeling About MU Stock?

On Stocktwits, retail sentiment around MU stock remained in ‘bullish’ territory over the past week.

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Investors will be watching for Micron's guidance for the next quarter and its comments on 2027 memory pricing and supply. MU stock is up about 276% this year and has gained roughly 17% from its September low, not accounting for Monday’s pre-market dip.

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