Micron Technology, a major player in the semiconductor industry, has faced challenges in the past year due to concerns about oversupply in the memory sector. Despite this, analysts from UBS recommend a long-term investment strategy in Micron stock, suggesting that current market conditions may not reflect the company's future potential.
Analyst Timothy Arcuri highlights a mild oversupply expected in the first half of 2025, leading to pricing pressures. However, he predicts a stabilization in prices by the third quarter and a recovery in the fourth quarter and early 2026. Arcuri also remains optimistic about Micron's roadmap for High Bandwidth Memory (HBM), particularly the HBM3E 12-Hi product. Micron's recent progress in HBM technology and the acquisition of AUO's LCD facility in Taiwan are expected to enhance its back-end HBM production capacity. Market projections indicate a significant increase in HBM demand, positioning it as a substantial contributor to DRAM bit demand and revenues.
The consensus among market analysts is a Strong Buy rating for Micron stock, with an average price target of $136, suggesting a potential upside of around 40%. Arcuri himself assigns a Buy rating with a price target of $125, indicating a projected one-year gain of 28%. Overall, despite short-term challenges, Micron's advancements in HBM technology and strategic capacity expansions make it an attractive option for long-term investors.