Micron Technology (MU) Stock Forecast & Price Target

Micron Technology's outlook is positively influenced by the expansion of the total addressable market (TAM) for High Bandwidth Memory (HBM), which has been increased to $35 billion for 2025, reflecting strong volume shipments and average selling price (ASP) increases. Demand and inventory levels are improving across key segments, including servers, solid-state drives (SSDs), mobile, and PCs, indicating a robust customer base. Additionally, HBM revenue demonstrated significant growth, exceeding $1 billion with a quarterly increase of over 50%, supporting management's forecast for HBM market revenue to surpass $100 billion by 2030.

Micron Technology is facing a negative outlook due to significant declines in gross margins, with management guiding a non-GAAP gross margin of 36.5% for the third fiscal quarter, which is below both internal estimates and market expectations. The company's challenges are compounded by underutilization in NAND production, leading to a decrease in wafer output and a projected over 10% reduction in NAND wafer capacity by the end of FY25. These factors, alongside weaker average selling prices (ASPs) and a higher mix of lower-margin NAND products, contribute to a lack of recovery in gross margins, raising concerns about future profitability.