Micron (MU) Stock: HBM Demand and NAND Price Surge Drive Multiple Analyst Upgrades

TLDR

• Needham raised its Micron price target to $450, Deutsche Bank lifted theirs to $500 — both keeping Buy ratings
• Q1 FY2026 revenue hit $13.6 billion, up 57% year over year, with record free cash flow of $3.9 billion
• AI memory products are fully booked for 2026, with the shortage described as “unprecedented”
• DRAM prices forecast to rise 62% and NAND prices 40% in Q1 2026
• Supply constraints expected to last at least 12–18 months, with new capacity not online until mid-2027

Three major Wall Street firms have issued Buy ratings on Micron Technology in the past week, with price targets now ranging from $450 to $500, as tightening memory supply and surging AI demand push the stock higher.

Micron Technology, Inc., MU

On February 17, Needham analyst N. Quinn Bolton raised his price target from $380 to $450. The day before, Morgan Stanley’s Joseph Moore held his target at $450 with a Buy rating. Deutsche Bank went furthest, lifting its target from $300 to $500 on February 10, projecting that supply shortages could run through 2027 and into 2028.

Record Numbers Across Every Business Unit

Micron’s Q1 FY2026 results gave analysts plenty to work with. Revenue came in at $13.6 billion, up 21% sequentially and 57% year over year — the third consecutive quarterly record.

Gross margin expanded to 56.8%, an 11-percentage-point jump from the prior quarter. Free cash flow hit a record $3.9 billion.

Every segment posted record revenue: Cloud Memory at $5.3 billion, Core Data Center at $2.4 billion, Mobile and Client at $4.3 billion, and Automotive and Embedded at $1.7 billion.

Micron’s EVP of Operations Manish Bhatia called the memory chip shortage “unprecedented” in January. The company confirmed its AI memory products are fully booked for 2026.

Why Prices Keep Climbing

AI servers require high-bandwidth memory, or HBM, to handle massive data workloads. HBM uses roughly three times the wafer capacity of standard memory, meaning every unit produced reduces supply of other memory types and pushes prices up across the board.

UBS projects contract DRAM prices will rise 62% in Q1 2026 versus the prior quarter. NAND prices are expected to climb around 40%. TrendForce puts the total memory market at $551.6 billion in 2026, growing to $842.7 billion in 2027.

New Capacity Is Still Years Away

Micron has committed around $200 billion to expand U.S. facilities, but clean-room construction moves slowly. Its $50 billion Idaho expansion won’t begin wafer output until mid-2027. A $100 billion New York facility is scheduled for 2030.

SK Hynix’s Yongin cluster targets volume production in late 2027. Samsung is also raising capex from an already high baseline.

That leaves supply constraints firmly in place for at least the next 12 to 18 months across all three major players.

Micron’s February-quarter earnings, due next month, are expected to show revenue more than doubling year over year, with earnings forecast to grow more than fivefold from the same period a year ago.

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