Micron Technology, Inc. (NASDAQ: MU) surged 5.5% in premarket trading on Monday, driven by renewed optimism around the company’s high-bandwidth memory (HBM) business. The rally followed a note from UBS analyst Timothy Arcuri, who raised the stock’s price target to $225 from $195 while maintaining a ‘Buy’ rating.
UBS attributed the upgrade to an upward revision in HBM industry demand projections, reflecting Micron’s growing role in supplying next-generation memory solutions for AI data centers. The bank now expects HBM demand to reach 17.1 billion gigabytes in 2025 and 27.2 billion gigabytes in 2026, compared to previous estimates of 16.9 billion and 26.1 billion gigabytes. It also forecasts a 35% year-over-year growth in 2027, underscoring a sustained boom in AI-driven semiconductor demand.
UBS cited stronger momentum in NVIDIA’s Rubin platform and the inclusion of OAI systems with HBM3E 12-Hi configurations starting in 2026 as key catalysts. “We now have more confidence that HBM demand will expand significantly again in 2027. Most of the new wafer capacity across the memory industry through 2027 will go toward HBM, crowding out traditional DRAM,” UBS noted.
The report added that Micron’s new Idaho fabrication plant is unlikely to ramp up meaningfully before the second half of 2027, potentially creating short-term capacity constraints but supporting higher pricing.
UBS reaffirmed its view that the AI memory cycle is more durable this time, as suppliers allocate capacity to higher-value segments like HBM. On slightly improved estimates, the firm refreshed its sum-of-the-parts valuation, setting a $225 target price, which implies further upside potential from current levels.
About Micron Technology:
Micron develops and sells memory and storage products used in data centers, mobile devices, and emerging AI applications. The company is widely regarded as one of the top AI-linked semiconductor stocks, benefiting from the growing global demand for high-performance computing and next-gen memory technologies.
