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Phillip Securities analyst Yik Ban Chong initiated coverage of Micron at buy today.
HBM supplies are low and DRAM prices are spiking -- good news for Micron, which makes both.
Micron (NASDAQ: MU) stock resumed marching higher Monday, gaining 5.6% through 12:10 p.m. ET after Phillip Securities analyst Yik Ban Chong initiated coverage with a buy rating and a $500 price target on the $438 semiconductor stock.
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High hopes for NAND computer memory have been the driving force behind Micron's strong gains so far this year, but Chong shifts the focus back to DRAM today, specifically to high-bandwidth DRAM.
"Micron's high bandwidth memory (HBM) products are in high demand," says the analyst, "with its HBM3E chips designed into Nvidia's (NASDAQ: NVDA) Blackwell GPU and AMD's (NASDAQ: AMD) MI355 GPU," and this is driving DRAM prices in general "to the highest levels since 2019."
Looking ahead, Chong sees Micron's next-generation HBM4 memory winning market share from SK Hynix in Q3 2026 and beyond. Across 2026, the analyst notes that Meta (NASDAQ: META) and Microsoft (NASDAQ: MSFT) plan to increase capital spending by 76% and 90%, respectively -- translating into even more demand for Micron's products.
In total, Chong forecasts a 56% rise in DRAM prices in fiscal 2026.
Micron stock is already up more than 360% over the last 365 days, but its run may not be over yet.
The stock costs nearly 40 times trailing earnings, but with prices, sales, and profit margins all increasing, Micron costs barely 13 times forward earnings projections, and less than 11 times earnings forecasts for 2027.
With earnings expected to grow at nearly 60% annually over the next five years, Micron stock looks like a buy to me.
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Rich Smith has positions in Meta Platforms. The Motley Fool has positions in and recommends Advanced Micro Devices, Meta Platforms, Micron Technology, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.
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