UBS has maintained a Buy rating on Micron and kept its price target at $1,625, according to its latest report released on Aug. 11. Based on Micron’s Aug. 7 closing price of $877.57, that target implies roughly 85% upside.
The bank said the near-term pricing path for NAND has become noisier, but supply-demand tightness in DRAM, especially high-bandwidth memory, is now stronger than it had previously expected. The report landed just after storage stocks went through a sharp bout of volatility. SanDisk and Western Digital sold off after their guidance failed to meet elevated expectations, which weighed on sentiment across the AI storage chain. Micron then pulled back modestly after news that Apple had tested memory chips from China’s CXMT.
Even so, UBS said the market’s pricing of the AI memory cycle has not collapsed.
HBM remains at the center of the thesis
UBS said its core argument rests on HBM. With supply still tight, Nvidia is expected to adjust the VR300 configuration. While HBM capacity per GPU is now expected to come in below earlier assumptions, a larger number of VR300 units entering the supply chain led UBS to raise its 2027 total HBM consumption estimate to 61.5 billion Gb from 58.7 billion Gb.
On pricing, UBS expects blended industry HBM average selling prices in 2027 to rise about 79% year over year. It also said HBM4E pricing could exceed $30 per GB.
DRAM tightness may last through Q2 2028
Traditional DRAM also remains tight. UBS expects third-quarter industry DDR contract prices to rise about 20% quarter over quarter. For Micron, the bank forecasts DDR ASP to increase 20% in the third quarter and another 11% in the fourth quarter.
UBS added that even after factoring in CXMT capacity expansion, DRAM is likely to remain undersupplied at least through the second quarter of 2028.
NAND estimates were cut, but demand forecasts moved higher
NAND was the more cautious part of the report. UBS lowered its forecast for third-quarter industry NAND contract price growth to 20% from 28%, and cut its Micron NAND ASP growth estimate to 23% from 35%.
Demand assumptions, however, were revised higher. UBS said demand for server and storage SSD products remains strong, and it raised its NAND bit demand growth forecasts for 2026 and 2027 to 23% and 26%, respectively.
Earnings changes shift toward fiscal 2028
On earnings, UBS slightly lowered its Micron fiscal 2026 and fiscal 2027 EPS forecasts to $74.13 and $184.89, respectively. It raised its fiscal 2028 EPS estimate to $265.65 and said cumulative free cash flow could exceed $450 billion by 2028.
For the market, the message from UBS was straightforward. Storage names may continue to face short-term swings tied to earnings guidance, Apple supply-chain headlines, and news around competition from China. But as long as AI servers, HBM, and long-term supply agreements continue to lock up supply, Micron’s earnings peak may still not be fully reflected in the stock price.