Wall Street Analysts Raise Price Targets on Datadog, Micron, and Lam Research Amid AI Spending Wave

Three semiconductor and software companies are drawing elevated attention from top-ranked Wall Street analysts this week, as continued AI infrastructure spending prompts a round of upgraded price targets and reaffirmed buy ratings across Datadog, Micron Technology, and Lam Research.

Bank of America analyst Koji Ikeda raised his price target on Datadog to $260 from $225, while reiterating a buy rating on the AI-powered observability and security platform. The upgrade followed an investor webinar featuring Vikram Thaker, the senior director of North American business at global consulting firm Cognizant.

Ikeda said the session reinforced his confidence in the demand environment for what he described as "best-of-breed infrastructure software vendors" such as Datadog and JFrog. He cited the accelerating complexity that enterprises face as they move workloads to the cloud and integrate AI, arguing that demand for high-quality observability platforms will grow alongside that transition.

Datadog's first-quarter results, which came in well above estimates in early May, anchored the analyst's optimism. The company's second-quarter revenue growth outlook of more than 30% reinforced his view that Datadog can continue to beat and raise expectations. "Execution remains top notch, with improving demand trends supporting further beat-and-raise potential," Ikeda said. He ranks No. 867 among more than 12,200 analysts tracked by TipRanks, with a 55% profitable rating rate and an average return of 10.4%.

UBS analyst Timothy Arcuri offered a more dramatic revision for Micron Technology, lifting his price target to $1,625 from $535 while maintaining a buy rating. Arcuri cited structural changes in the memory market driven by AI demand, along with a new wave of long-term agreements that feature fixed-volume commitments and partially fixed pricing — a departure from the purely volume-based offtake agreements of prior cycles.

Supply chain checks suggest that up to 30% of double data rate memory volumes could soon be locked in at pricing only slightly below current levels, according to Arcuri. He raised his earnings per share estimates for Micron across calendar years 2027 through 2029, moving his 2027 figure to $155 from $133, his 2028 estimate to $167 from $122, and his 2029 projection to $117 from $77. He expects Micron's EPS to remain above $100 over that entire stretch and forecasts $400 billion in free cash flow across the period.

"We believe the market will start to put a more 'normal' multiple on the stock and MU will continue to re-rate higher as more details emerge about the structural changes AI has driven to the entire memory complex," Arcuri said. He ranks No. 2 among more than 12,200 analysts on TipRanks, with an 81% profitable rating rate and an average return of 56.6%.

Mizuho analyst Vijay Rakesh rounded out the trio with a raised price target on Lam Research, moving to $380 from $330 and reiterating a buy rating on the wafer fabrication equipment provider. The revision reflects his updated outlook for wafer fabrication equipment spending, which he now expects to rise 23% to $153 billion in 2026, followed by a 24% increase to $190 billion in 2027.

Rakesh sees additional upside to those estimates based on expanded capital expenditure plans at TSMC, Samsung, and Micron. He projects total memory WFE investment at approximately $112 billion for the current year and expects accelerating NAND node transitions to drive further demand, with Lam Research pointing to $40 billion in node transition spending — the bulk of which is expected before the end of 2027.

"With higher revised 2026E/2027E WFE spend, we now see significant upside to consensus estimates for LRCX, MKSI, and AMAT, with LRCX potentially offering the most compelling estimate upside as the steady outperformer vs. WFE and peers," Rakesh said. He ranks No. 4 on TipRanks, with a 74% profitable rating rate and an average return of 79.2%.

The cluster of upgrades underscores a broader shift in analyst sentiment, as the latest earnings season has eased concerns about a potential pullback in AI-related capital spending and reinforced conviction that infrastructure demand remains durable well into the back half of the decade.

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