Key insights
- UBS significantly raised its price target for Micron Technology to $1,625, citing a stronger-than-expected outlook for memory demand, particularly for HBM. The firm now anticipates industry undersupply in DRAM and NAND to extend further, boosting earnings estimates through 2029. This positive revision for a key semiconductor player suggests robust demand in a critical tech sector, potentially benefiting the broader equity market.
Investing.com - UBS raised its price target on Micron Technology (NASDAQ:MU) shares to $1,625 from $535 while maintaining a Buy rating on the stock. The semiconductor giant currently trades at $751 with a market capitalization of $846.93 billion, reflecting a remarkable 706% gain over the past year.
The firm increased its earnings estimates for calendar years 2027, 2028, and 2029 to $155, $167, and $117 per share, respectively, from prior estimates of $133, $122, and $77. UBS said it expects earnings per share to remain above $100 through calendar 2029 and projects Micron will generate over $400 billion in free cash flow across the same period. The company currently trades at a P/E ratio of 35.33 and generated diluted earnings of $21.26 per share over the last twelve months.
UBS now expects the DRAM industry to remain undersupplied until at least the second quarter of calendar 2028, compared to its prior forecast of the fourth quarter of 2027. The firm also expects NAND undersupply to last until the fourth quarter of 2027, versus its previous estimate of the third quarter of 2027.
The firm raised its assumptions for Micron’s HBM average selling price per gigabyte, now modeling a 50% year-over-year increase compared to its prior 35% estimate. UBS maintained its HBM bit shipment assumptions of 7.78 billion gigabits for calendar 2026 and 12.05 billion gigabits for calendar 2027.
UBS said its supply chain work suggests up to 30% of DDR volumes industry-wide will be locked in at pricing slightly below current levels through long-term agreements. The firm’s new price target is based on approximately 15 times next-twelve-months price-to-earnings ratio on calendar 2029 earnings per share of $117, discounted by one year.For deeper insights, InvestingPro subscribers have access to over 20 additional ProTips for Micron, plus comprehensive Pro Research Reports covering 1,400+ top US stocks with actionable intelligence for smarter investing decisions.
In other recent news, Micron Technology has commenced production of its advanced 1α DRAM at its Manassas, Virginia facility. This technology, described by the company as the most advanced memory technology manufactured in the United States, will significantly increase the company’s DDR4 wafer supply. In another development, Mizuho has raised its price target for Micron to $800, maintaining an Outperform rating due to strong pricing expectations for NAND and DRAM products in the coming years. Similarly, BofA Securities increased its price target for Micron to $950, citing an optimistic outlook on AI-driven memory demand. These price target adjustments reflect the analysts’ positive expectations for Micron’s future performance. Meanwhile, the broader chip sector experienced a pullback following recent inflation data, impacting various companies in the industry.
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