Citi announced on Tuesday that it has lowered its price target for Micron Technology, pointing to recent weakness in DRAM spot prices after a notable pullback in mainstream product categories.
The bank's analyst, Atif Malik, noted that "mainstream DDR5 16GB DRAM product prices are down ~6% since Micron reported," and said this development prompted a 17% reduction in the firm's price target for Micron - from $510 to $425.
Despite the reduction in target price, Citi did not alter its earnings forecasts for the company. The firm cited ongoing negotiations between Micron and large cloud customers - hyperscalers - as a potential offset that could help steady contract pricing even as spot prices retreat.
Malik wrote that memory suppliers have started talks around "3-5 year strategic or long-term agreements to lock in base volumes, pre-payments, and adjustments to quarterly pricing based on market conditions," arrangements Citi believes should underpin contract revenue even during periods of softer spot-market pricing.
At the same time, Citi tied the recent spot-price declines to apprehension about TurboQuant, saying that at face value, efficiency techniques can reduce compute and memory cost per query. Malik added that such advances "further unlock usage, which ultimately increases compute/memory demand."
The note compared the potential demand effects of TurboQuant to the impact Citi expects from DeepSeek, arguing that historically, cheaper or more efficient technology has tended to expand overall consumption of compute and memory resources.
Citi also described the role of KV cache in AI workloads, stressing its importance for enabling models to produce longer and more complex outputs. The bank emphasized that compute intensity rises as each new token "attends to all the previous tokens," a dynamic it sees as reinforcing long-term structural demand for memory capacity.
While acknowledging near-term pressure on spot prices, Citi kept a Buy rating on Micron, pointing to accelerating AI-driven demand as a core support for the company's outlook.
Separately, the note referenced a product called ProPicks AI, which evaluates Micron (MU) alongside thousands of other companies each month using more than 100 financial metrics. According to that description, the AI generates stock ideas by assessing fundamentals, momentum, and valuation. The write-up cited past winners identified by the tool, including Super Micro Computer (+185%) and AppLovin (+157%), and suggested investors could use it to see whether MU is currently included in ProPicks strategies or to find comparable opportunities.