Pricing surge in conventional DRAM sets Micron up for earnings upside

Investing.com -- Micron’s guide and earnings could see a boost from a sharp rebound in conventional DRAM pricing and growing demand for high speed NAND tied to generative AI workloads. Co reports quarterly results on December 17.

Contract prices for DDR5 and LPDDR5 have risen far enough that gross margins on those products are now set to exceed HBM in the first quarter of fiscal 2026.

With about 90% of Micron’s DRAM bits tied to conventional products, Mizuho said that shift could lift revenue and margins more than investors expect.

About 60% to 65% of Micron’s server, handset and PC DRAM contracts reprice quarterly, and automotive DRAM pricing is also due for a reset, giving the company further leverage into calendar 2026, according to analysts at Mizuho.

Micron is expanding high bandwidth memory output by about 60% next year, but Mizuho said HBM will still represent only about 8% to 10% of its bit mix.

That leaves the company more exposed to the accelerating strength in mainstream DRAM, where pricing is tightening on limited supply.

The analysts said GPU and ASIC suppliers may need to improve HBM pricing terms to prevent memory makers from shifting too far toward conventional DRAM, where the near term economics are better.

Mizuho also highlighted strength building in NAND. They said rapid growth in AI token generation, longer context windows and multimodal video models is pushing demand beyond on chip HBM into high performance QLC solid state drives.

With industry NAND wafer capacity expected to fall about 10% next year and spot prices up sharply in recent weeks, the analysts see room for revenue and pricing upside in Micron’s February quarter.

Mizuho raised its fiscal 2026 estimates to $56 billion in revenue and $17.89 in EPS, and lifted fiscal 2027 forecasts to $66.1 billion and $21.69.

Mizuho increased its price target to $270 from $265 and kept an Outperform rating, saying Micron is positioned to benefit from stronger pricing across both DRAM and NAND as AI driven memory demand broadens.

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