Micron Technology, Inc. (NASDAQ:MU) is recognized among the top AI Stocks trending with investors. On October 8, UBS analyst Timothy Arcuri revised the price target for the stock up to $225.00 from a previous estimate of $195.00 while still endorsing a Buy rating.
This change was based on heightened forecasts for high-bandwidth memory (HBM) demand. UBS has adjusted its HBM industry demand predictions to 17.1 billion gigabytes for 2025 and 27.2 billion gigabytes for 2026, an increase from earlier projections of 16.9 billion and 26.1 billion gigabytes, respectively. The firm also expects HBM demand to surge by an estimated 35% year-over-year in 2027.
“Given the recent advancements in the compute area and our updated CoWoS supply assessments, we are more optimistic about HBM demand significantly expanding again in C2027. For the short term, we anticipate HBM industry demand of 17.1B Gb for C25 and 27.2B Gb for C26, up from our earlier estimates of 16.9B Gb and 26.1B Gb respectively. The drivers of this increase include: (1) the incorporation of OAI – which effectively brings in approximately 700k units with HBM3E 12-Hi starting in C26 and (2) higher anticipated NVDA (Rubin) unit volumes for the upcoming year (+400k to 7.4MM versus 7.0MM previously).
“Crucially, we now project that HBM industry demand could rise by approximately 35% Y/Y in C27. This sets a positive scene for the sector, and we still estimate that MU will capture some modest share beyond C2H:25 levels, although this may be limited by certain capacity constraints (we do not foresee significant ramp-up from new Idaho fabrication facilities until 2H:27). Overall, we reaffirm our long-standing belief that this cycle will prove to be more resilient as HBM “crowds out” the conventional memory market (almost all capacity additions across the industry through C2027 are expected to be directed toward HBM), enabling suppliers to focus on more lucrative markets. With slightly elevated forecasts, we have refreshed our SOTP valuation approach and raised our price target to $225.
Micron Technology, Inc. (NASDAQ:MU) engages in the design and sale of memory and storage solutions for data centers, mobile devices, and a range of global industries.
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