Micron Technology's stock advanced sharply in Thursday trading, climbing approximately 5% to $429.11 on heavy volume of 13.6 million shares. The catalyst was the company's confirmation that it has begun shipping its next-generation high-bandwidth memory (HBM4) products to customers.
Supply-Demand Imbalance to Persist
Chief Financial Officer Mark Murphy, speaking at a Wolfe Research investor conference, stated that demand for HBM "significantly exceeds our supply capacity." He indicated the tight market conditions are expected to continue past 2026, with Micron pursuing multi-year supply agreements to secure its position.
Analysts React with Target Increases
Financial institutions quickly revised their outlooks. Morgan Stanley raised its price target on Micron to $450 from $350, maintaining an Overweight rating. The firm anticipates Micron will become an HBM supplier to Nvidia by the second quarter. Deutsche Bank analyst Melissa Weathers set a more bullish $500 target, highlighting AI-fueled demand colliding with constrained DRAM supply as manufacturers shift capacity to HBM production.
Weathers also noted a potential risk: if memory prices escalate too rapidly, it could lead to "demand destruction" as customers struggle to absorb the higher costs.
Competitive Landscape Intensifies
The race to supply critical AI memory is heating up. Rivals Samsung Electronics and SK Hynix have also announced their own HBM4 shipments. SK Hynix specifically emphasized its intention to maintain its market leadership during the transition to this new memory standard.
Investor focus now shifts to Micron's execution. The market is closely monitoring the HBM4 production ramp-up, pricing trends for DRAM and NAND flash memory, and any potential softening in AI server demand, which could immediately impact memory sector stocks.
The company has not yet scheduled its next quarterly earnings report, though external calendars suggest a potential date of March 18. Traders will scrutinize the release for concrete data on HBM shipment volumes, supply agreements, and pricing power.
