Since September, it has risen over 50%. Next week, Micron's financial report, the market needs a "strong HBM narrative."

Before Micron's earnings report, Barclays is optimistic about the short-term rebound in the NAND business and long-term growth in the HBM business, raising its target price to $175.

According to news from the Chasing Wind Trading Desk, Barclays stated in its latest report that the temporary recovery in NAND flash memory business and the long-term upward trajectory of high bandwidth memory (HBM) market share will drive Micron's stock price to perform strongly after the earnings report is released.

Barclays analyst Tom O'Malley indicated that Micron is expected to announce results slightly better than the previously forecasted median, providing stronger guidance based on the increase in NAND flash shipments and average selling prices. The investment bank expects Micron's revenue for the fourth fiscal quarter to reach $11.26 billion, a quarter-on-quarter increase of 21%, slightly higher than Wall Street's expectation of $11.15 billion.

Analysts pointed out that although there has not yet been a turning point in NAND flash spot prices, there has been a large-scale procurement activity in Silicon Valley following Broadcom's announcement, which is a temporary growth. In terms of HBM business, Micron's market share is expected to rise from the current "low 20%" further, with an additional 5% share growth potentially contributing over $2 billion in revenue.

Based on this, Barclays raised Micron's target price from $140 by 25% to $175, leaving a 3.5% upside potential from the current price, maintaining an "overweight" rating, with a rise of over 50% since September and over 100% year-to-date.

Short-term improvement in NAND business, eSSD demand driving growth

Barclays has raised its expectations for Micron's NAND flash memory business, with fourth-quarter NAND revenue expected to increase from the previous $2.28 billion to $2.32 billion, an 8% quarter-on-quarter growth, mainly driven by improvements in average selling prices (which are expected to decline 2% quarter-on-quarter, better than the previously expected decline of 4%). The first fiscal quarter NAND revenue expectation has been significantly raised to $2.56 billion, a 10% quarter-on-quarter growth, far exceeding the previous expectation of $2.25 billion.

It is important to note that this growth is defined as "temporary growth." Analysts pointed out that the hard disk drive market size far exceeds that of the flash data center market (1100EB+ compared to 200EB+), and most of the future growth will still be met by the transformation of hard disk technology. Additionally, most enterprise-grade SSD product lines are based on around 100-layer NAND technology, which will not further restrict the supply of NAND in personal computers and smartphones.

The investment bank expects Micron's first fiscal quarter NAND flash shipments to increase by 5% quarter-on-quarter (previously expected to decline by 5%), with average selling prices rising by 5% quarter-on-quarter (previously expected to rise by 4%), and gross margin is expected to improve from the previously expected 29.4% to 31.5%.

Steady increase in HBM market share, optimistic long-term outlook

In the high bandwidth memory business, Barclays believes this quarter is the most likely time for Micron to hint at an increase in HBM market share next year, and it may support this expectation through more aggressive capital expenditure guidance According to Barclays data, Micron's HBM market share has steadily increased over the past 12 months, rising from 6% in the second quarter of 2024 to 19% in the second quarter of 2025. During the same period, SK Hynix's share dropped from 65% to 53%, while Samsung's share increased from 16% to 38%.

Currently, Micron expects to "reach an HBM share similar to the overall DRAM share (just over 20%) sometime in the second half of 2025." Barclays anticipates that the company may be more aggressive in expanding its share. The investment bank estimates that an additional 5% market share next year could contribute over $2 billion in revenue.

Analysts point out that Micron's management's statements may shift from "We are confident we can sell out" to "We are sold out." Micron's commentary during the quarter indicates that the company is confident about selling out its HBM supply for 2026, which may be one of the reasons for the company's eventual increase in capital expenditures to meet demand.

Financial Expectations Raised Across the Board, Valuation Attractiveness Enhanced

Barclays has raised its financial expectations for Micron, increasing the fiscal year 2025 revenue/earnings per share forecast from $40.93 billion/$9.50 to $41.3 billion/$9.67, and for fiscal year 2026 from $49.06 billion/$12.13 to $50.82 billion/$13.17.

The new target price of $175 is based on 13.3 times the 2026 earnings per share of $13.17, up from the previous target price of $140 based on 11.5 times the 2026 earnings per share of $12.13. Barclays stated that the target price increase is primarily due to improvements in the supply-demand environment and pricing environment.

In terms of capital expenditures, the investment bank expects Micron to maintain $14 billion this year, but it may reach $16 billion next year, mainly for DRAM capacity expansion to meet HBM demand, while NAND spending is expected to remain flat or decline.