Micron’s (MU) HBM Demand Outlook Brightens — UBS Hikes Target to $225

Core Viewpoint - Micron Technology, Inc. has received a price target increase to $225.00 from $195.00 by UBS analyst Timothy Arcuri, maintaining a Buy rating due to strong demand projections for high-bandwidth memory (HBM) [1][2]. Industry Demand Forecast - UBS has raised its HBM industry demand forecast to 17.1 billion gigabytes for 2025 and 27.2 billion gigabytes for 2026, up from previous estimates of 16.9 billion and 26.1 billion gigabytes respectively [2]. - HBM demand is expected to grow approximately 35% year-over-year in 2027, indicating a robust market outlook [2][4]. Factors Driving Demand - The increase in HBM demand is attributed to the inclusion of OAI, which is expected to add around 700,000 units with HBM3E 12-Hi starting in 2026, and higher unit volumes from NVIDIA, projected to increase by 400,000 to 7.4 million units [3]. - The overall sentiment is that HBM will increasingly dominate the memory market, with most capacity additions in the industry through 2027 directed towards HBM [4]. Company Positioning - Micron Technology is expected to gain modest market share beyond the second half of 2025, although growth may be limited by capacity constraints, particularly with the new Idaho fab not ramping significantly until the second half of 2027 [4]. - The company develops and sells memory and storage products for various applications, including data centers and mobile devices [4].