Micron (MU) is set to report fiscal second-quarter results on March 18, and GF Securities believes the company will reiterate its view that the memory cycle will remain “robust” for some time.
“We now forecast DRAM contract prices to rise by 100% in 1Q26, followed by >30% QoQ in 2Q26 with further upside given current asking prices in 50-60% range,” analyst Jeff Pu wrote in a note to clients. “For Micron, we forecast FY2Q26 revenue to be $23B with [a] gross margin of 77%. Looking ahead, we expect 3Q26 revenue guidance to be $29B and a margin further [to] grow to 83%. In terms of HBM development, we see Micron [sic having] secured its HBM4 order (likely ~10Gbps version) with [a] small patch starting [in] March.”
Pu has a Buy rating on Micron and upped his price target to $571.
Delving deeper, Pu said he believes the cloud service providers are now trying to secure between four and six months worth of inventory, compared to two months. And smartphone makers are trying to get to roughly seven weeks of inventory, compared to four to five weeks in the fourth-quarter of 2025, but below the average of seven to nine weeks.
Pu also said that memory supply is likely to remain “short” next year, despite Micron’s Idaho fab ramping up and announcements from Sk hynix (HSXCL) and Samsung (SSNLF).
“Meanwhile, AI-related demand is expected to account for 75+% DRAM demand in 2027, and the short supply may last into 2H27,” Pu added. “As [a] result, [the] memory maker’s visibility has greatly improved, and we see 3-5 years [long-term agreements] are now being negotiated.”
A consensus of analysts expects Micron to earn $8.59 per share on $19.1B in revenue.