Micron Technology’s (NASDAQ:) HBM market is projected to grow at a compound annual growth rate (CAGR) of around 65% over three years, reaching approximately $17.5 billion by calendar year 2026. This is according to a report by Mizuho, which has increased its stock price target to $130, up from the previous $124, while reiterating its Buy rating on the stock. The firm’s updated forecast for fiscal year 2024 takes into account new tax assumptions that align with Micron’s guidance, as well as the anticipated growth in the AI and High Bandwidth Memory (HBM) sectors.
Mizuho analysts highlighted several key factors influencing the revised target. There is an expectation that HBM pricing will be locked in for 2024 but could see an upside towards the end of the year and into early 2025. Moreover, a significant catalyst is foreseen with the introduction of a 12-Layer 36Gb HBM for a 288GB stack in the first half of 2025.
The market for HBM in 2024 and 2025 could be worth approximately $9 billion and $13 billion, respectively, with the potential to increase to about $10-11 billion and $14-15 billion. Micron’s competitive edge in the HBM market is also noted, with its HBM3E offering comparable performance to peers but with around 30% lower power consumption and no extreme ultraviolet (EUV) lithography, leading to reduced costs.
In conclusion, Mizuho has reaffirmed its Buy rating on Micron Technology (NASDAQ:) stock and increased its price target to $130. The firm made adjustments to its estimates based on these insights, reflecting its confidence in Micron’s continued growth in the AI and High Bandwidth Memory markets.
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