BlockBeats News, August 11th, UBS, in its latest report, maintained a "Buy" rating on Micron Technology and a $1625 price target, indicating roughly 85% upside from the August 7th closing price of $877.57. The bank stated that while there is short-term price noise in the NAND market, the supply-demand tightness in DRAM, especially HBM, has exceeded previous expectations.

At the time of the report release, storage stocks had just experienced intense volatility. Following disappointing guidance in the earnings reports of SanDisk and Western Digital, AI storage chain sentiment was dragged down; Micron later fell slightly due to news of Apple testing China's CXMT memory chips. However, UBS believes that the market's pricing of the AI memory cycle has not collapsed.

UBS's core thesis focuses on HBM. The report stated that due to continuous supply tightness, NVIDIA will adjust the VR300 configuration; although the HBM capacity per GPU is lower than previously expected, with more VR300 units entering the supply chain, the overall HBM consumption in 2027 will increase from 587 billion Gb to 615 billion Gb. UBS expects that the average selling price of industry-mixed HBM in 2027 will increase by approximately 79% year-on-year, and the price of HBM4E may exceed $30/GB.

Traditional DRAM is also tight. UBS predicts that the industry's DDR contract price will increase by about 20% QoQ in the third quarter, Micron's own DDR ASP will rise by 20% in the third quarter, and another 11% in the fourth quarter. The bank believes that even with the consideration of CXMT's expansion, there will still be a supply-demand gap for DRAM at least until the second quarter of 2028.

NAND is the relatively conservative part of the report. UBS has revised down its third-quarter industry NAND contract price increase expectation from 28% to 20%, and Micron's NAND ASP increase expectation has also dropped from 35% to 23%. However, demand for servers and storage SSDs remains strong, and UBS has raised its 2026 and 2027 NAND bit demand growth forecasts to 23% and 26%, respectively.

In terms of earnings forecasts, UBS has slightly lowered Micron's EPS for the 2026 and 2027 fiscal years to $74.13 and $184.89, respectively, but raised the 2028 fiscal year EPS to $265.65, and expects cumulative free cash flow to exceed $450 billion by 2028.

For the market, UBS's signal is very direct: storage stocks may still be affected in the short term by earnings guidance, Apple's supply chain, and China competition news disruptions, but as long as AI servers, HBM, and long-term supply agreements continue to secure the supply, Micron's profit peak may not yet be fully priced into the stock.