Investing.com -- D.A. Davidson initiated coverage of Micron Technology with a Buy rating and a $1,000 price target on Monday, the highest on Wall Street, arguing that artificial intelligence is fundamentally reshaping the memory industry in ways that markets have yet to fully appreciate.

"We believe artificial intelligence is creating a longer-than-usual memory cycle as compute deployment and demand generation exist in a positive feedback loop, creating a structurally higher ceiling for memory pricing and demand," analyst Gil Luria said in a note.

The broker’s target, which implies roughly 91% upside from Micron’s last closing price of $524.56, is based on 10x its fiscal year 2030 earnings estimate of $139 per share, discounted back three years at 10%.

Luria’s bullishness rests on the argument that prior memory cycles operated on a relatively fixed demand ceiling — capacity additions eventually outpaced demand, margins compressed, and the cycle turned.

But AI has now disrupted that pattern. Luria notes that each new compute deployment "unlocks new use cases, creating incremental demand that didn’t exist before the infrastructure was built."

Supporting that view, the analyst points to the emergence of multi-year strategic customer agreements (SCAs), with Micron becoming the first memory supplier to announce a five-year supply deal in March. Samsung and SK Hynix are said to be in similar discussions with hyperscaler customers.

The analysts argue that this shift away from one-year contracts materially changes the demand visibility and pricing stability available to memory suppliers.

"We are not arguing that there isn’t a cycle, just that the duration and extent of the cycle may not be priced in properly," Luria said.

On the product side, he highlights Micron’s node leadership — four consecutive generations in DRAM, three in NAND — as a compounding cost advantage.

High-bandwidth memory (HBM) seen as the central driver of Micron’s growth, with the company expanding its HBM market share from roughly 5% in 2024 to approximately 21% by the second quarter of 2025, surpassing Samsung to become the second-largest HBM supplier.

"The market is still framing the cycle through the lens of prior downturns, which appears to underestimate the demand environment, especially relative to the rest of the semi complex," Luria said.

"Combined with Micron’s node leadership and what we see as a long duration earnings power story, we see meaningful upside to shares," he concluded.