UBS Raises Micron Price Target to $450
UBS analyst Timothy Arcuri raised the price target on Micron Technology (NASDAQ: MU) to $450.00 (from $400.00) while maintaining a Buy rating.
“In conjunction with our latest round of industry checks, we once again flag strengthening pricing dynamics across both core DRAM and NAND.
We now forecast C1Q26 industry contract pricing for DDR to be up ~62% Q/Q – a touch better than prior – and NAND up ~40% Q/Q (vs. +27% prior).
More importantly, our industry conversations now point to memory supply shortages extending deeper into C2027 – with DRAM potentially remaining undersupplied through C4Q27 and NAND until C1Q27.
This is despite our view that accelerating memory price inflation will drive some degree of demand destructions and de-spec’ing in PCs and Smartphone (for which we have revised our estimates lower;).
The bottom line is that strong Data Center demand is more than offsetting these headwinds.
Alongside this, we roll forward our bottom-up HBM forecast into C2027 and now expect end-consumption to reach ~49B Gb in C2027 (up +57% Y/Y) – with all major AI accelerator vendors converging on a full three-supplier sourcing strategy rather than, in some cases, relying heavily on only two suppliers.
This reads positively for MU as it could drive share gains – particularly at Google and sourcing to OpenAI.
Net of it all, we now forecast memory industry revenue (DRAM+NAND) to reach ~$566B in C2026 and $788B in C2027 – or larger than the entire semiconductor industry in C2024.
We are hearing more investors questioning the sustainability of the upcycle, but we think things will last long enough and MU EPS will go high enough that it is hard to see how the stock does not keep working.
We move EPS estimates higher yet again and now see EPS of ~$54 in C2026 and ~$75 in C2027E – meaning that MU trades at only ~5x earnings while HDD stocks trade at >2x this multiple assuming a very rosy 2-yr scenario for HDDs.
We still don’t get why this should be the case, and we raise our PT from $400 to $450 and remain Buy.”
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