Deutsche Financial institution Bullish on Micron (MU) Forward of Earnings, Sees Robust AI-Pushed Demand

Micron Expertise, Inc. (NASDAQ:MU) is likely one of the AI Shares You Ought to Not Ignore. On September 15, Deutsche Financial institution reiterated the inventory as “Purchase” and raised its value goal to $175 per share from $155 forward of earnings later this month.

The agency believes there may be numerous motive to rejoice forward of earnings scheduled for after market shut on Sept. 23

“We’re elevating our estimates for the second time this quarter and reiterating our Purchase ranking on MU’s shares into earnings.”

The agency sees DRAM provide staying tight into 2026 pushed by excessive HBM demand, which is able to assist ASP development and drive gross margins greater.

Furthermore, in NAND, pricing momentum and rising content material per machine provides assist. The agency additional famous that considerations round 2026 HBM costs are overstated and that Micron is well-positioned to keep up its HBM market share at “still-attractive profitability ranges.”

“We see DRAM provide remaining tight into 2026 pushed by HBM absorbing a big quantity of bit capability (3:1 commerce ratio and rising). This provide tightness ought to end in wholesome ASP development, driving GMs greater (DB sees clear path to >50% GMs). In NAND, we’re inspired by current pricing momentum, in addition to cases of rising content material per machine (see current cellphone launches, hyperscaler eSSDs, and so forth.) We imagine current fears round HBM pricing in 2026 to be overblown, and see MU as significantly effectively positioned to keep up its HBM market share at still-attractive profitability ranges. We don’t anticipate the corporate to supply a lot incremental commentary on present HBM contract negotiations given the uncertainty on provide in 2026 + uncertainty of timing of latest product launches by prospects. Given the rising significance of HBM in AI functions in addition to a vastly favorable provide/demand atmosphere, we see room for upside not just for MU’s estimates, but additionally its a number of. On greater estimates (CY26 revs rise +3% to $54.3b; EPS rises +6% from $14.55 to $15.45), we increase our P/T to $175 primarily based on a constant ~11x P/E. Reiterate Purchase ranking.”

Micron Expertise, Inc. (NASDAQ:MU) develops and sells reminiscence and storage merchandise for information facilities, cell gadgets, and numerous industries worldwide.

Whereas we acknowledge the potential of MU as an funding, we imagine sure AI shares provide better upside potential and carry much less draw back danger. In case you’re on the lookout for a particularly undervalued AI inventory that additionally stands to profit considerably from Trump-era tariffs and the onshoring pattern, see our free report on the finest short-term AI inventory.

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