Melius Sets Street-High $2,200 Target on Micron, Implying 110.7% Upside

Rosenblatt analyst Kevin Cassidy initiated coverage of Sandisk with a Buy rating and a $2,400 price target, arguing that AI workloads are transforming NAND flash from a commodity into critical computing infrastructure. The call follows a 698.69% year-to-date rally in Sandisk stock. Cassidy said new AI compute platforms create an opportunity to reposition NAND from a commodity storage medium to a more system-critical component of AI infrastructure, crediting Sandisk's BiCS8 and BiCS10 platforms and its 25-year manufacturing partnership with Kioxia. The $2,400 target is set at 10 times his fiscal 2028 earnings estimate, and he argues that New Business Model agreements with eight of the largest NAND customers could cover roughly 65% of fiscal 2028 production. Sandisk, spun off from Western Digital in February 2025, closed fiscal Q4 2026 with revenue of $8.965 billion, up 371.59% year over year, and non-GAAP EPS of $39.25 against a $33.28 consensus, while data center revenue reached $2.977 billion. CEO David Goeckeler cited more than four years of demand visibility through NBMs, with total expected revenue from signed agreements of at least $93.9 billion assuming floor pricing. Sandisk trades at roughly 8x forward earnings against a fiscal 2028 EPS consensus of $264.72 and a $2,125.09 average analyst target.

Arm Holdings shares rose 17% to $323 after CEO Rene Haas told CNBC that demand for the company's technology was off the charts and that he is increasingly convinced Arm can surpass its $2 billion revenue target for its developing AGI CPU business. That goal has moved quickly: Arm began in March with an initial target of $1 billion, raised it to $2 billion in May, and by September Haas said the pipeline was above that level. Nvidia's Vera CPU, Google's Axion, Amazon's Graviton5, and Microsoft's Azure Cobalt all use Arm-based computation, tying the company to the expanding trend of CPUs paired with AI accelerators. Haas also pointed to supply restrictions on wafers, substrates and testing capacity that could take years to work through, a problem that nonetheless shows demand is outstripping available capacity. The larger story is Arm's effort to move away from its usual licensing arrangement and capture more value from the chips themselves, and Monday's surge suggests investors are increasingly focused on that opportunity.

A buzzy reception for Meta's new AI assistant Muse and softer oil prices lifted stocks to start the week, with Meta surging more than 11% on Monday on demand for its new agent. The broader AI stock universe rallied too, as US chipmaker AMD surged almost 10% on Monday to become the latest trillion-dollar-valued stock and the SOX chip sector index rose more than 4%. South Korean exports rose 78.3% in the first 20 days of September from a year earlier to $71.4 billion, the highest 20-day performance on record, as semiconductor shipments increased 259.4%. Brent slipped below $100 per barrel on Tuesday after Kyodo News reported Iran had offered to reopen the Strait of Hormuz within seven days if the US takes initial steps to ease military pressure, and Saudi Arabia restarted operations at its East-West Pipeline. Attention now turns to Thursday's summit between President Trump and China's Xi Jinping, where AI risks are likely to top the agenda alongside a potential trade truce extension and geopolitical flashpoints like Taiwan and the Iran war.