UBS Reiterates Buy Rating on Micron

UBS analyst Timothy Arcuri reiterated a Buy rating on Micron Technology (NASDAQ: MU).

“Based upon our industry checks, we increase base-line DDR contract pricing to +32% QoQ in 3Q26 (was +17%) and +18% QoQ in 4Q26 (was +12%), after +67% QoQ in 2Q26.

Depending upon pricing under longer term agreements (LTAs), as well as HBM pricing and mix, the QoQ ASP comparisons will vary though by memory vendor.

We continue to forecast the DRAM industry to be undersupplied until at least 2Q28. The gap between bit demand growth in 2027 (+36.2% YoY) and supply (+19.3%) is too wide to close by then.

If we assume no inventory digestion downstream in 2027 (i.e., no customers’ inventory rebuild in 2H26), then the sufficiency ratio would actually deteriorate to -13.6% from -8.1% in 2026E.

Both are unprecedented levels over the last 30 years. As for NAND flash, we now forecast +30% QoQ in 3Q26 (was +17%) and +12% QoQ (unchanged) in 4Q26 after +67% QoQ also in 2Q.

We forecast the NAND upcycle to continue til at least 4Q27. Net net, this leaves us forecasting memory industry revenues to reach US$992bn in 2026 and US$1,763bn in 2027.

The main risk to this unprecedented upcycle remains affordability by customers, notably hyperscalers which will have to continue to tap capital markets to finance this capex”

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