Micron Stock Price Forecast - MU Soars to $263, With HBM Profits — Analysts See $455 Target

Micron’s $263.23 Rally Highlights the Start of an AI Memory Supercycle Fueled by Record HBM and DRAM Pricing

Micron Technology Inc. (NASDAQ:MU) is trading at $263.23 (+4.28%), marking a new 52-week high and a 59% YTD gain, as AI infrastructure spending continues to drive the sharpest memory upcycle in a decade. With a market cap of $292.86 billion and a P/E ratio of 34.68, the stock has outpaced the S&P 500’s 3.4% rise, powered by the surge in high-bandwidth memory (HBM) and server DRAM demand from data center expansion. Micron’s stock chart on TradingNews.com shows a steep parabolic move since Q3 2025, supported by volume spikes in institutional accumulation as AI capex hits record levels globally.

AI Demand Reshapes Micron’s Revenue Mix as DRAM Sales Dominate at 79% of Total

Micron has strategically pivoted from consumer memory to enterprise and AI infrastructure. DRAM now accounts for 79% of total sales, up from 69% a year earlier, reflecting a near-complete transition toward data center and automotive end-markets. Within DRAM, the HBM (High Bandwidth Memory) segment is the major growth driver, supplying chips for NVIDIA (NASDAQ:NVDA), AMD (NASDAQ:AMD), and other hyperscalers. Q4 FY2025 saw HBM revenue climb to $2 billion, putting the business on an $8 billion annualized run rate, with 2026 pricing agreements already locked in.

The HBM4 series, expected in 2026, carries 50%–70% higher ASPs than HBM3E, pricing between $500–$550 per unit. Early samples are being validated in collaboration with TSMC (NYSE:TSM), solidifying Micron’s role as a top-tier supplier in the AI compute supply chain. With wafer allocation increasingly diverted from mobile and commodity DRAM to HBM lines, supply constraints are pushing DDR4 prices up 158% and DDR5 up 307% since September, according to TrendForce data. This “AI memory premium” has become a structural driver of profitability, supporting higher ASPs across the entire DRAM portfolio.

Strategic Consumer Exit Strengthens Margins and Capital Allocation

Micron announced its exit from the Crucial consumer memory brand effective February 2026, reallocating resources toward AI and data center products. This move, initially misunderstood by markets, reflects a focus on maximizing wafer profitability rather than shrinking market presence. Micron still sells DRAM and NAND kits through OEM partners, ensuring continued exposure to the PC and mobile ecosystem.

The decision also mitigates volatility in low-margin retail segments, allowing Micron to strengthen balance sheet flexibility. Management has signaled capital expenditures near $20 billion in FY2026, much of which targets fab expansion in Japan and the U.S. under CHIPS Act incentives. The result will likely be net cash status by 2026, with EBITDA margins expected to climb above 50% and free cash flow growth averaging over 100% CAGR through 2028.

Q1 FY2026 Expectations: $12.7B Revenue and $3.83 EPS Point to Explosive Growth

Micron reports Q1 FY2026 results on December 17, and analysts project $12.7 billion in sales, up 46.3% year-over-year and 10% sequentially. EPS is expected at $3.83, representing 114% YoY growth and aligning with the high end of guidance ($3.75 ± $0.15). Over the past six months, EPS estimates have surged 37.7%, while free cash flow forecasts rose 14.9% for FY2027, underscoring a major upgrade cycle across Wall Street models.

Micron’s gross margin is projected to expand into the low 50% range, up 12 percentage points from last year, driven by product mix shift and operational leverage. The company’s FY2026 revenue is forecast at $48 billion, with annualized sales growth exceeding 24% CAGR through 2028.

Valuation Metrics and Upside Potential: $389–$455 Target Range

Based on The Aerospace Forum’s multi-scenario valuation, Micron’s upside potential remains compelling even after the rally. Using median EV/EBITDA multiples, the base case yields a $389.46 target (+54% upside), while the peer-comparison model implies $455.88 (+81% upside). The valuation gap reflects Micron’s improving cash generation profile: EBITDA growth of 30% annually and substantial margin expansion through FY2027 as the firm transitions to next-gen memory nodes.

At the same time, forward P/E of 14.1x remains conservative compared to peers like SK Hynix and Samsung’s semiconductor division. The memory industry’s oligopolistic structure—Micron, SK Hynix, and Samsung collectively hold 90% DRAM share—reduces pricing volatility risk while enhancing long-term profitability through coordinated capacity control.