Micron (MU) shares jumped more than 8% in early trading on Wednesday after Morgan Stanley upped its estimates and price target on the memory maker, citing the continued supply shortages.
“As much as happened in the last 12 months in DRAM, we remain excited for what’s ahead,” analyst Joseph Moore wrote in a note to clients. “With another round of significant price increases coming in Q1 and still indications that supply growth in 2026 will do little to alleviate the intense shortage we expect further pricing increases through this year. DDR5 spot pricing is up another 30% YTD and currently 130% above [the] Jan. contract (up 86% from Dec.). Meaning that mainstream pricing can double again and still be >10% below spot – and spot is still going up. Further, we have confidence that mainstream prices may approach that high teens ASP per GB level, as we are seeing buyers who were not early to lock in pricing paying close to that much already.”
Moore reiterated his Overweight rating on Micron and raised his price target to $450 from $350.
Delving deeper, Moore believes Micron could earn as much as $52 per share in 2026, due in large part to high-bandwidth memory and Nvidia’s (NVDA) insatiable demand for it.
“HBM is certainly a key part of the story here, and a market that needs to continue to be healthy to justify the ‘higher highs, higher lows’ thinking investors are willing to pay higher multiples for,” Moore added. “But at this point DDR5 pricing has come up to the point where [as] a much more attractive market right now, and so while there continues to be concerns on Micron’s status for HBM4 we don’t expect any negative earnings impacts.”
Regarding the recent dip in the stock, Moore said it’s been “difficult” to see what has spurred the recent concerns, though he expects SK Hynix (HXSC.F) will get the majority of Nvidia’s early Rubin volume; and if Micron has any unforeseen issues ramping up its HBM4 products, HBM3e is still the majority of the market.
Update: Micron said at an investor conference on Wednesday there has been some “inaccurate reporting” on high-bandwidth memory and that the company is in high-volume production on HBM4 and shipments to customers have commenced. Additionally, Micron has sold out its calendar year 2026 HBM supply, and that yield is on track.
(This story has been updated to include additional information.)