Micron Technology Inc (NASDAQ:MU) heads into its fiscal third-quarter earnings with renewed momentum, as Wedbush analysts raised their price target on the stock to $150 from $130, citing stronger-than-expected memory fundamentals and a long-term transformation driven by high-bandwidth memory (HBM).
Wedbush now values Micron at 11x times its EPS estimates, above typical cycle highs for a memory stock, but believes Micron is evolving beyond its historical commodity status.
“HBM is changing Micron’s growth and margin profile and arguably shouldn’t be treated/valued like a commodity,” the analysts wrote in a note.
The analysts believe memory pricing trends improved in the second calendar quarter, particularly for both DRAM and NAND
While Wedbush no longer expects the sharp pricing inflection they had modeled earlier this year, they still see prices rising in the quarters ahead.
Key to the improving outlook is stronger-than-expected demand from enterprise and server markets, including workloads tied to artificial intelligence.
“Better fundamentals in our view are driven by a pickup in enterprise/server demand that started in the April timeframe and looks to hold through the rest of the year as demand for both AI and standard workloads appears to be better than might have been initially anticipated,” Wedbush wrote.
Micron previously guided for higher bit shipments in the fiscal third quarter, but with pressure on pricing and margins due to a heavier mix of consumer-grade products. However, Wedbush now believes those dynamics shifted more favorably during the quarter.
“The shifting dynamics in the calendar second quarter, in our view, suggests that mix and ASPs likely trended better than Micron’s guidance had anticipated, both in DRAM and NAND,” they wrote. “As such, we are lifting our modeled expectations towards the high end of Micron’s guided range.”
Looking further ahead, the analysts have adjusted their forecast to reflect modest near-term pricing gains but stronger HBM-driven growth over the longer term.
“While our EPS, revenue and margin expectations dip for fiscal year 2026, given more modest pricing expectations for commodity DRAM and NAND for much of next fiscal year, our shift in bit expectations for HBM also leads to our EPS and gross margins outlook exiting fiscal year 2026 at higher levels than we had previously anticipated,” they wrote.
Wedbush also sees industry-wide implications from Micron’s HBM ramp, which could support a healthier supply-demand balance in standard memory products.
“We view growing HBM requirements as not just positive for Micron’s numbers, but also ultimately positive for industry dynamics as capex and clean room space are reallocated to support HBM growth,” they wrote.
Micron will report its fiscal third quarter earnings on Thursday, June 26.
Shares of Micron traded hands at about $123 late morning on Friday, having surged more than 45% in the year to date.