Micron Stock Upgraded to Buy as New Street Sees $2 Trillion Valuation Potential

New Street Research has upgraded Micron Technology (NASDAQ: MU) to a Buy rating with a $1,250 price target, arguing that the semiconductor company is entering a fundamentally different memory cycle driven largely by artificial intelligence demand.

In a Friday research note, New Street highlighted the extraordinary rise in Micron stock, which has climbed more than tenfold from its April 2025 lows. Over the same period, Micron’s production value, measured through cost of goods sold (COGS), increased only about 25%. According to the firm, this divergence suggests the current memory market is behaving differently from the traditional boom-and-bust cycles seen over previous decades.

The upgrade follows research New Street began in July to determine whether structural changes in the memory industry could produce more sustainable growth. Its long-term projections are particularly bullish.

By 2030, New Street estimates Micron could accumulate more than $600 billion in cash while generating over $150 billion in annual free cash flow at peak levels. Even during a potential downturn after 2030, the firm expects financial performance to remain considerably stronger than in previous memory cycles. Its model projects a trough involving roughly $18 billion of free cash flow burn, followed by annual free cash flow exceeding $100 billion throughout a four-year downturn.

AI is central to that outlook. New Street expects artificial intelligence applications to represent roughly two-thirds of memory demand, helping the market achieve approximately 15% annual growth beyond 2030. That compares with an average growth rate of around 10% over the previous two decades.

Valuation could also benefit from the expanding role of high-bandwidth memory (HBM). While memory companies have historically traded at roughly three to six times COGS throughout a cycle, New Street believes HBM deserves a higher multiple because it is less exposed to the cyclicality associated with commodity DRAM.

Based on these assumptions, New Street estimates Micron Technology could eventually reach a market capitalization of $2 trillion to $3 trillion by 2030, reinforcing its bullish outlook for the AI-driven memory leader.