The artificial intelligence boom continues to deliver tangible results for Micron Technology. In a powerful signal from its core business, the company has reported that its entire production capacity for next-generation HBM4 memory chips scheduled for 2026 is already sold out. This development was warmly received by the market, propelling the company’s share price upward by more than 10%. Concurrently, several prominent investment banks have revised their price targets for the stock significantly higher.
Strong Quarterly Performance and Forward Guidance
Micron’s recent financial performance has exceeded market expectations. Its latest quarterly results, reported in December, showcased earnings per share of $4.78, surpassing the consensus estimate of $3.77. Revenue reached $13.64 billion, a figure that not only topped the anticipated $12.62 billion but also represented a substantial year-over-year increase of 56.7%.
Looking ahead, management has provided guidance for the second quarter of 2026, projecting an earnings margin between $8.22 and $8.62 per share. The company’s next quarterly earnings announcement is scheduled for March 18, 2026, which is expected to reveal the precise financial impact of the robust HBM demand and favorable pricing environment.
Unprecedented Demand for High-Bandwidth Memory
Reports indicate that Micron has initiated volume production of its HBM4 chips ahead of the original schedule. A critical detail is that the complete output for the year 2026 has already been allocated to customers. This demand is primarily driven by hyperscale cloud providers and AI infrastructure companies seeking to secure essential memory components for their next-generation systems.
High-Bandwidth Memory (HBM) is a foundational element in modern AI servers, enabling the high data transfer rates required for complex machine-learning workloads. The fact that Micron can sell out an entire year’s HBM4 production well in advance highlights the severe supply constraints within the AI memory market. This scarcity is a key factor influencing pricing dynamics and manufacturer margins, a trend also reflected in the broader DRAM market.
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Substantial U.S. Manufacturing Investment
In parallel, Micron is advancing a major expansion of its manufacturing footprint within the United States. According to reports, the company plans to invest approximately $200 billion in this endeavor. The strategic move aims to mitigate a potential supply shortfall in the memory sector, which industry observers describe as exceptionally large.
This focus on higher-margin HBM products has led to strategic shifts in other business areas. Notably, Micron previously announced it would discontinue its consumer-focused Crucial brand in February to reallocate production capacity toward these in-demand segments.
Wall Street Responds with Revised Targets
The strong fundamentals have prompted several investment banks to raise their price targets for Micron shares in recent days:
- Deutsche Bank: Increased its target from $300 to $500 on February 10, while also raising its calendar year 2026 earnings per share (EPS) estimate to $46.50.
- Morgan Stanley: Lifted its target from $350 to $450 on February 11, citing rising DRAM prices and ongoing supply shortages.
- Needham & Company: Confirmed its “Buy” rating and raised its target from $380 to $450 on February 17.
Analysts at Morgan Stanley pointed to significant price movements in the market, noting that DDR5 spot prices have climbed 30% since the start of the year and now stand approximately 130% above January contract prices. This environment is viewed as highly favorable for memory chip producers.
In summary, Micron finds itself at the confluence of sold-out future capacity for its most advanced products, a rising price environment for memory, and substantial investments in new manufacturing. These factors collectively paint a picture of robust demand and strategic positioning for the coming years.
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