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

Micron Technology, Inc. (NASDAQ:MU) is one of the AI Stocks on the Market’s RadarOn October 8, UBS analyst Timothy Arcuri raised the price target on the stock to $225.00 (from $195.00) while maintaining a Buy rating.

The firm quoted stronger high-bandwidth memory (HBM) demand projections behind the rating affirmation. UBS increased its HBM industry demand forecast to 17.1 billion gigabytes for 2025 and 27.2 billion gigabytes for 2026. This is up from previous estimates of 16.9 billion and 26.1 billion gigabytes, respectively. It also anticipates  HBM demand to grow an estimated 35% year-over-year in 2027.

“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.”

Micron Technology, Inc. (NASDAQ:MU) develops and sells memory and storage products for data centers, mobile devices, and various industries worldwide.

While we acknowledge the risk and potential of MU as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MU and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT:10 AI Stocks In The Spotlight For Investors and 10 Hot AI Stocks to Keep on Your Radar

Disclosure: None.

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