Micron Technology Inc (NASDAQ:MU) has earned a price target lift from Wedbush analysts ahead of its fiscal first quarter earnings on Wednesday, with the firm pointing to stronger-than-expected improvements in memory industry pricing and a more favorable margin outlook.
The firm raised its 12-month price target on the chipmaker to $300 from $220 while reiterating an ‘Outperform’ rating.
Micron shares were trading around $241 at their time of writing, giving the company a market capitalization of roughly $271 billion.
Wedbush said it increased its estimates and valuation assumptions after recent trends in the memory market pointed to a sharper lift in average selling prices than previously expected.
Wedbush expects Micron to deliver another earnings beat and raise, pointing to rapidly improving pricing conditions over the past quarter.
“DRAM spot prices saw steep gains in September and October, with manufacturers also lifting pricing considerably for smaller customers,” the analysts wrote. “NAND benefited from a similar lift in pricing, albeit with sharp gains coming in October/November.”
As such, Wedbush’s analysts now expect Micron’s fiscal Q1 results to exceed the company’s guidance.
The analysts said they lifted their quarterly estimates to slightly above the high end of Micron’s initial forecast, adding that they “would not be surprised if our revised model proves overly conservative.”
Looking ahead, the firm believes Micron’s fiscal second quarter will benefit from further increases in memory pricing.
Wedbush estimates that calendar fourth quarter DRAM pricing could rise by at least 30%, while NAND pricing could increase by at least 20%, though it noted that the magnitude of gains realized by each manufacturer can vary based on product mix and contract structures.
The analysts added that if Micron’s NAND and DRAM prices rise only in the high single- to low double-digit range in the near term, they would expect more significant gains to materialize in the following quarter, in line with broader industry pricing trends.
Wedbush said it is taking a more cautious approach to its fiscal third quarter outlook to allow for potential conservatism in management’s guidance, assuming average selling price increases of around 10%.
The note also reflects changes to Wedbush’s longer-term margin assumptions. They expect Micron to achieve gross margins of about 60% over the next several quarters, roughly in line with peak levels from the prior memory cycle. If those margins are sustained, Wedbush estimates Micron could generate more than $30 in earnings per share over its next fiscal year.
On high-bandwidth memory, Wedbush addressed investor questions about Micron’s HBM4 performance relative to competitors. While the firm said it does not have a definitive view on transfer-rate comparisons, it downplayed the concern.
“We see any concern as being a red herring,” the analysts wrote, citing management’s indication that Micron’s HBM production is fully allocated for 2026 and noting that margins for commodity memory parts appear set to match or exceed those of HBM.