Micron Technology (NASDAQ: MU) is positioned to capitalize on the AI boom through its high‑bandwidth memory (HBM) leadership. Analysts expect a sold‑out 2026 HBM supply to drive a sharp earnings surge, with revenue and EPS projected to jump dramatically as AI servers demand ever‑higher memory bandwidth, and to reinforce Micron’s competitive edge in the fast‑growing semiconductor sector.
Why HBM Powers AI Server Growth
HBM delivers data to GPUs from Nvidia, AMD and other AI‑focused chips at speeds far beyond conventional DRAM, making it essential for modern AI workloads. Its stacked architecture consumes more fab capacity per bit, creating a natural supply constraint that can translate into premium pricing for manufacturers that secure volume.
HBM vs Conventional DRAM
Unlike standard DRAM, HBM provides significantly higher bandwidth per pin, reducing latency and power consumption in AI accelerators. This performance advantage drives server designers to allocate a larger share of memory budget to HBM, especially as model sizes continue to expand.
Revenue and Earnings Outlook
Projected HBM Revenue Growth
Analysts forecast HBM revenue to increase 164 % in 2026 and an additional 40 % in 2027, reflecting the expanding memory demand per AI rack.
EPS Acceleration
Micron’s adjusted earnings per share are expected to rise by more than 275 % over the next two years, supported by higher HBM pricing and strong AI‑driven demand.
Analyst Consensus and Valuation
The consensus among analysts is a “Buy” rating, with the majority assigning strong‑buy or buy recommendations. The average price target sits around $346.66, implying a modest downside from the current trading level, while the most optimistic outlook reaches $500. Micron’s current valuation remains below its historical average multiple, offering potential upside if earnings accelerate as projected.
Capacity Expansion Timeline
New manufacturing capacity is slated to come online after the 2026 demand peak. Two fabs in Boise, Idaho, are expected to ramp in 2027‑2028, and a larger complex in New York is planned for the later part of the decade, suggesting that the near‑term supply squeeze will persist through 2026.
Market Context and Risks
The AI server market is rapidly expanding, with hyperscale data centers scaling GPU clusters for generative‑AI workloads. As AI models grow, memory bandwidth per rack rises sharply, cementing HBM’s role. Risks include a potential slowdown in AI spending, faster‑than‑expected supply‑side catch‑up, or breakthroughs in alternative memory technologies, all of which could temper growth.
Investor Takeaways
- High‑growth potential: Sold‑out HBM pipeline and strong AI demand could drive a significant earnings rally.
- Valuation discount: Current multiples are below historical averages, providing a margin of safety.
- Upside scenarios: Price targets range up to $500 if HBM constraints hold and earnings accelerate.
- Key risks: Dependency on continued AI spending and the timing of new fab capacity.
