09:15 AM EDT, 06/26/2025 (MT Newswires) -- Micron Technology ( MU ) is gaining from rising demand for AI-related memory, Morgan Stanley said in a note Thursday, highlighting strong quarterly results driven by higher volumes and better prices in core DRAM.

Micron reported a nearly 37% year-over-year increase in revenue for the May quarter, reflecting strong momentum in AI and data center products. Morgan Stanley said this growth, coupled with improving gross margins, positions Micron well for continued strength through 2025 despite potential market headwinds.

Morgan Stanley said the biggest inflections are now behind Micron, but it expects continued improvements through 2025 as robust AI demand supports volumes, consumer mix, and gross margins.

Risks remain, including potential pricing pressure and uncertainties in consumer demand, but Morgan Stanley said the ongoing strength in AI-related memory is the main reason for its more optimistic view.

Morgan Stanley raised its price target for Micron Technology ( MU ) to $135 from $98, and maintained an equal-weight rating.