Micron Technology (MU) PT Raised to $225 at UBS on HBM Industry Optimism

UBS analyst Timothy Arcuri raised the price target on Micron Technology (NASDAQ: MU) to $225.00 (from $195.00) while maintaining a Buy rating.

The analyst commented, "On the back of recent announcements across the compute space and our latest CoWoS supply checks, we have more confidence that HBM demand will expand significantly again in C2027. For the near-term, we now see HBM industry demand of 17.1B Gb/27.2B Gb in C25/C26 up from prior 16.9B Gb/26.1B Gb. This is being driven by: (1) the inclusion of OAI - effectively, ~700k units with HBM3E 12-Hi starting in C26, and (2) higher NVDA (Rubin) unit volumes into next year (+400k to 7.4MM vs 7.0MM prior). Most importantly, we now believe HBM industry demand could grow another ~35% Y/Y in C27. This is a great backdrop for the sector and we still model MU to gain some modest share beyond C2H:25 levels, but this will be likely capped by some capacity constraints (we don’t see wafers from new Idaho fab ramping significantly until 2H:27). Net-net, we reiterate our long-held view that the cycle will prove more durable this time as HBM “crowds out” the traditional memory market (most, if not all, of the capacity addition across the industry through C2027 will go to HBM), still allowing suppliers to allocate bits to higher value markets. On modestly higher estimates, we refresh our SOTP valuation framework, and raise PT to $225."

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