Micron Earnings: We Raise Our DRAM Forecast and Valuation Behind Stronger Pricing Assumptions

We raise our fair value estimate for no-moat Micron Technology to $110 per share, from $80, behind a higher medium-term growth and margin forecast. We now expect significant growth through fiscal 2026 for Micron, driven primarily by higher DRAM expectations. We believe high-bandwidth memory, or HBM, will augment growth, but we also expect standard DRAM to benefit from strong pricing over the next few years. AI investment is a meaningful contributor to our forecast across both HBM and standard DRAM, with data center GPUs requiring higher memory content, as well as higher content in AI-enabled PCs and smartphones. We see demand outpacing supply through calendar 2025, supporting high prices that should drive strong revenue for Micron. We also expect gross margins to benefit from strong pricing and a rising mix of HBM revenue, which is margin-accretive already.