On Monday, Mizuho showed confidence in Micron Technology (NASDAQ:MU) by increasing 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 (NASDAQ:BAND) Memory (HBM) sectors.
The analyst 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.
Mizuho estimates that 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. This 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.
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.
The firm's report concludes by reaffirming the Buy rating and increasing the stock price target to $130, with adjustments made to the estimates to reflect these insights.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.