Why Micron's stock is a standout gainer as the market falters

By Emily Bary and Britney Nguyen

Memory stocks are seeing further momentum as an analyst highlights that pricing trends could get stronger for longer

Micron's stock is up 18% so far this year.

The strength of the memory-chip boom seems enough to outweigh the broader market's prevailing concerns about tariffs and escalating geopolitical tensions.

Just 134 stocks in the S&P 500 are moving higher in Tuesday morning action, according to Dow Jones Market Data, as the S&P 500 drops. Some of the biggest gainers are in the memory and storage sector: Sandisk's (SNDK) stock is up 9.3%, while Western Digital's stock (WDC) is up 3.6%, Micron Technology's stock (MU) is up 2.7% and that of Seagate Technology (STX) is up 1.2%.

Heading into the open, Mizuho trading-desk analyst Jordan Klein wondered if shares of memory providers, which have been some of the biggest winners in recent months, would "collapse" as investors sought out less risky bets, or if the market would instead cling to stocks that have outperformed so far this year. Tuesday's early action points to the latter.

The memory market has been on fire over the past year as artificial intelligence drives up the need for dynamic random-access memory and NAND flash memory. In an environment where the market's few memory suppliers have chosen to be disciplined about controlling supply, those companies have been able to benefit from huge price increases and can lock in long-term deals.

See more: Micron's stunning stock gains are encapsulated by this milestone

TD Cowen analyst Krish Sankar offered some more good news for memory investors on Tuesday, writing that shortages of both DRAM and NAND were "worsening, not improving," which could lead to even stronger prices going into the second half of the year.

"We are not ready to fully underwrite this in the model given how quickly pricing narratives move," but investors could start to expect about $50 per share in earnings for Micron this year, Sankar said. The average FactSet estimate is for $35.54 in earnings per share this calendar year.

Sankar was also upbeat about Micron's ability to secure long-term arrangements with its customers. He noted that Dell's management recently indicated that shortages could extend into the second half of next year, while other companies are bracing for the shortages to last into 2028.

His latest round of industry conversations "strongly supports suppliers' leverage in dictating terms," he wrote.

With expectations for memory prices to rise, Sankar's team wrote that DRAM and NAND could make up a higher percentage of capital expenditures for cloud-service providers, reaching the midteens percentage-point range. That would drive more multiyear long-term agreements, Sankar said.

Sankar lifted his price target to $450 from $300, with that new target representing 24% upside relative to Friday's close.

Meanwhile, Sankar said he expects Micron to continue outperforming semiconductor capital equipment makers such as Applied Materials (AMAT) and Lam Research (LRCX), which have also popped on the AI momentum. Constraints in clean room space, which is where chip manufacturing takes place, pose a limit to near-term upside for semicap names, Sankar said.

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-Emily Bary -Britney Nguyen

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01-20-26 1142ET