Micron Technology's HBM Capabilities Set for Tenfold Demand Surge

Written by Emily J. Thompson, Senior Investment Analyst

MU-1.21%

Source: Fool

Updated: 1h ago

0mins

Source: Fool

Surging Market Demand: High-bandwidth memory (HBM) demand is projected to grow tenfold over the next decade, with only three companies globally capable of producing HBM at scale, highlighting Micron Technology's unique competitive advantage in this niche.
Strong Financial Performance: Micron reported revenue of $13.6 billion in its latest quarter, a 56% increase from $8.7 billion a year ago, while operating cash flow improved significantly to $8.4 billion, reflecting the company's robust performance amid a memory market recovery.
Undervalued Stock: Micron's current forward P/E ratio is close to 11, significantly lower than the tech industry average of 26, indicating that its stock is relatively undervalued, presenting a strategic buying opportunity for investors.
Pricing Power: With limited HBM supply and continuously rising demand, Micron has the ability to raise prices, further strengthening its market position, making it an opportune time for investors to consider buying in to leverage its competitive edge.

$334.05+Infinity%1D

Analyst Views on MU

Wall Street analysts forecast MU stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for MU is 228.21 USD with a low forecast of 170.00 USD and a high forecast of 325.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.

29 Analyst Rating

26 Buy

3 Hold

0 Sell

Strong Buy

Current: 338.130

Low

170.00

Averages

228.21

High

325.00

Current: 338.130

Low

170.00

Averages

228.21

High

325.00

Mizuho

Vijay Rakesh

Outperform

upgrade

$290 -> $390

Al Analysis

2026-01-09

New

Reason

Mizuho

Vijay Rakesh

Price Target

$290 -> $390

Al Analysis

2026-01-09

New

upgrade

Outperform

Reason

Mizuho analyst Vijay Rakesh raised the firm's price target on Micron to $390 from $290 and keeps an Outperform rating on the shares. The firm adjusted targets in the semiconductors and semiconductor capital equipment group as part of its 2026 outlook. Mizuho sees continued upside for the group in 2026 due to "attractive valuations," but more modest than 2025. The analyst' top sectors in 2026 are AI accelerators and wafter fab equipment, Optical, and memory, while the firm remains cautious on electric vehicles, autos and analog as well as computers and handsets. Mizuho's top picks for 2026 are Nvidia, Lumentum and Broadcom.

UBS

Buy

maintain

$300 -> $400

2026-01-07

Reason

UBS

Price Target

$300 -> $400

2026-01-07

maintain

Buy

Reason

UBS raised the firm's price target on Micron to $400 from $300 and keeps a Buy rating on the shares. Micron management highlighted the durability of the memory cycle, emphasizing that AI has made DRAM more strategic and faster HBM obsolescence reduces customer inventory buildup, the analyst tells investors in a research note. These dynamics could lessen the severe cyclicality historically seen in the market and support more durable EPS, UBS says.

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Piper Sandler

Overweight

maintain

$275 -> $400

2026-01-07

Reason

Piper Sandler

Price Target

$275 -> $400

2026-01-07

maintain

Overweight

Reason

Piper Sandler raised the firm's price target on Micron to $400 from $275 and keeps an Overweight rating on the shares. The firm highlights that supply for calendar 2026 is effectively sold out, with limited ability to add capacity. Management noted pricing for high value products, such as HBM4, will be value derived. Piper continues to view the company as extremely well positioned as demand should continue to outstrip supply.

Morgan Stanley

Overweight

maintain

$338 -> $350

2025-12-18

Reason

Morgan Stanley

Price Target

$338 -> $350

2025-12-18

maintain

Overweight

Reason

Morgan Stanley raised the firm's price target on Micron to $350 from $338 and keeps an Overweight rating on the shares. The firm, which notes that Micron guided to $8.19 of EPS versus consensus at $4.78, had expected upside to its estimate, which was 10% above consensus, but adds "clearly we underestimated" as very strong DDR5 pricing has less of an HBM offset than the firm might have expected. "As long as the AI music plays, we believe this is going to keep happening," the analyst tells investors.

About MU

Micron Technology, Inc. provides memory and storage solutions. The Company delivers a portfolio of high-performance dynamic random-access memory (DRAM), NAND, and NOR memory and storage products through its Micron and Crucial brands. The Company's products enable advancing in artificial intelligence (AI) and compute-intensive applications. Its segments include Cloud Memory Business Unit (CMBU), Core Data Center Business Unit (CDBU), Mobile and Client Business Unit (MCBU) and Automotive and Embedded Business Unit (AEBU). CMBU is focused on memory solutions for large hyperscale cloud customers, and high bandwidth memory (HBM) for all data center customers. CDBU is focused on memory solutions for mid-tier cloud, enterprise, and OEM data center customers and storage solutions for all data center customers. MCBU is focused on memory and storage solutions for mobile and client segments. AEBU is focused on memory and storage solutions for the automotive, industrial, and consumer segments.

About the author

Emily J. Thompson

Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.