UBS Strongly Backs Micron Stock in Bold Move

Micron Technology Inc. (NASDAQ: MU) has witnessed a remarkable surge in its stock price this year, experiencing a growth of 169%. However, recently the shares have dropped by 10% from an all-time high achieved earlier this month. This decline is primarily attributed to market anxieties surrounding the technology sector and artificial intelligence.

Insights from the Global Technology Conference

At the Global Technology Conference, held in New York, Micron executives revealed potential increases in capital expenditures. Chief Financial Officer Mark Murphy indicated that their current annual spending pace of $18 billion may face pressure. This is due to anticipated market tightness extending beyond 2026 and existing long-term commitments to customers.

Additionally, Chief Technology Officer Scott DeBoer expressed confidence in the company’s technological capabilities. He stated that Micron is in the “strongest position in history” with robust yields on the gamma node and several product rollouts planned over the next two years.

Analyst Perspectives

Despite concerns surrounding capital expenditures, UBS analyst Timothy Arcuri remains optimistic. Ranked seventh among Wall Street analysts, he noted that Micron’s recent comments align closely with his industry insights. He pointed out that supply tightness is now expected to persist until the end of 2026, which is a more extended period than previously predicted.

• Micron’s High Bandwidth Memory (HBM) supply is fully booked through 2026.
• Arcuri predicts that core DRAM profitability will continue to strengthen.
• DDR gross margins are anticipated to exceed HBM margins by early 2026.

Arcuri believes that despite no pre-announcement of quarterly earnings, Micron’s operational performance is likely exceeding its expectations. Recent negotiations for DDR5 contracts have shown significant increases, with quarter-over-quarter growth approaching 20% and mobile DRAM prices rising nearly 40% sequentially.

Future Projections for Micron Stock

Arcuri maintains a Buy rating on Micron shares, raising his price target from $245 to $275. This new target implies a potential 22% increase in the stock’s value in the coming months. Analysts generally support this sentiment, as Micron holds a Strong Buy consensus rating, supported by 26 Buy recommendations against three Hold ratings.

However, the average target of $227.14 indicates that shares may remain stable for the time being. Investors should be vigilant for potential updates on price targets or ratings that may arise shortly.

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