Memory prices decline, Citi significantly lowers Micron target price

Glonhui March 31｜Citigroup has significantly lowered Micron Technology's target price by 17%, citing a recent notable decline in spot prices of DDR5 DRAM, but has maintained its buy rating and all profit forecasts unchanged, believing the long-term logic of AI-driven storage demand remains fundamentally intact. In a research report released on March 31, Citigroup analyst Malik reduced Micron's target price from $510 to $425, a drop of 17%. As of the market close on March 30, Micron's stock price stood at $321.80, still offering about 32% upside relative to the new target price. According to the report, mainstream DDR5 16GB DRAM spot prices have recently declined about 6%, largely due to market concerns regarding Google's TurboQuant technology. This technology is believed to potentially reduce memory consumption for AI inference, thus sparking market worries about the outlook for storage demand. Micron and its peers have begun negotiations with hyperscale cloud computing vendors on strategic long-term agreements spanning 3 to 5 years. The framework of these agreements includes locking in base procurement volumes, prepayment arrangements, and mechanisms for quarterly price adjustments based on market conditions, which are expected to provide effective support for contract prices.