HSBC Boosts Micron Target to $500 Citing 45% DRAM ASP Gain
HSBC lifted its Micron price target to $500 from $350, citing 45% QoQ DRAM ASP gains and projecting $12B Q2 operating profit on $20B sales. Micron sold out its 2026 HBM supply and committed over $200B to U.S. fab expansions in Virginia and Idaho to meet AI-driven memory demand.
1. Record First Quarter Fiscal 2026 Results Drive Revenue and Profitability
Micron Technology reported first quarter fiscal 2026 revenue of $13.64 billion, up 56.7% year-over-year, driven primarily by surging demand for high-bandwidth memory in AI applications. The company delivered earnings per share of $4.78, topping consensus estimates by $1.01 and representing a 167% increase from $1.79 in the year-ago quarter. Operating cash flow reached $8.4 billion, a record high that outpaced the prior year’s $5.7 billion, while gross margin expanded by 17.3 percentage points to 62.0%, reflecting improved pricing in both DRAM and NAND businesses.
2. Sold-Out 2026 Memory Inventory and Capacity Expansion Plans
Micron has pre-sold its entire calendar year 2026 inventory of high-bandwidth memory, locking in price and volume contracts before the end of 2025. To address persistent supply shortages, the company plans to invest over $200 billion in U.S. manufacturing capacity through expansions at its Virginia facility and two new fabs in Idaho and New York. In addition, Micron executed a letter of intent to acquire a Taiwanese fab for $1.8 billion, underscoring its commitment to meeting data center and AI inferencing platform requirements.
3. Institutional and Analyst Support Bolster Investor Confidence
In the third quarter, Avidian Wealth Enterprises established a new position of 2,165 shares valued at approximately $362,000, joining other institutions that collectively own over 80% of outstanding shares. Wall Street sentiment remains bullish: four analysts assign a Strong Buy rating, thirty rate the stock as Buy and the consensus target price stands at $346.66. Raymond James and Cantor Fitzgerald recently raised their targets to $310 and $450 respectively, reflecting confidence in Micron’s earnings leverage and memory pricing momentum.
4. Insider Transactions and Subsequent Guidance
Corporate insiders sold 287,500 shares worth $65.9 million over the past ninety days, including director and CAO dispositions that reduced stakes by 20.7% and 4.97% respectively. Despite these sales, Micron maintained robust guidance for its second quarter, projecting EPS between $8.22 and $8.62 and indicating year-over-year revenue growth exceeding 130%. Equally notable is the planned capital expenditure increase of 7% starting in late fiscal 2027, signaling sustained investment to support long-term memory capacity requirements.