Micron stands to benefit from pricing trends in the memory market — even if it weren’t to make any high-bandwidth-memory shipments next year
Micron Technology Inc. shares have been feeling the love from Wall Street analysts lately, and Rosenblatt Securities just underscored one of the most bullish outlooks on Wall Street a day before the company’s highly anticipated earnings report.
Rosenblatt’s Hans Mosesmann reiterated his $225 price target on Micron shares MU, +1.52% in a late Monday report, with that target implying more than 60% upside from Monday’s close. The target lift comes as Micron is soon due to report results for its fiscal third quarter that will show how artificial intelligence is impacting the business.
”We expect Micron to deliver a beat-and-raise as we enter one of the largest memory cycles in history,” Mosesmann wrote.
He’s upbeat about favorable supply-demand trends going forward, especially in regards to high-bandwidth memory, which is seeing growing appreciation in the artificial-intelligence era.
“Industry HBM supply continues to be an issue to watch as supply does not catch up to demand well into calendar 2025,” he wrote. “Industry yields for HBM3e [a type of HBM product] continue to be challenging, which is made more problematic by continuing demand acceleration.”
The plus side of those yield issues, though, is that they could push average selling prices higher, Mosesmann said.
The HBM trends also could have a positive impact on the broader market for dynamic random-access memory, or DRAM, given the higher wafer requirements of HBM. That means that even if Micron isn’t able to make any HBM shipments in its next fiscal year, it could still deliver revenue upside due to average-selling-price benefits in the DRAM market generally, according to Rosenblatt.
And he doesn’t think Micron will end up with no DRAM shipments next year: His model calls for a contribution in the single digits.
Still, “allocating more HBM to wafer DRAM leads to lower overall bit supply and longer cycles, regardless of yields,” he wrote.
Despite the optimism from Mosesmann, who rates the stock a buy, Micron shares are essentially flat in Tuesday morning trading, during a session in which the PHLX Semiconductor Index SOX is up 0.5%.