On Friday, Mizuho Securities adjusted its outlook on Micron Technology (NASDAQ:MU), increasing the price target to $150 from the previous $130 while maintaining a Buy rating on the stock. The firm's decision follows a meeting with Micron's CFO Mark Murphy, CTO Scott DeBoer, Director of IR Samir Patodia, and CVP of IR & Treasury Satya Kumar.
During the discussion, several key points were emphasized, including Micron's success in ramping up its HBM3E technology, which is noted for its 30% reduction in power consumption. This advantage is expected to help Micron achieve a 20-25% market share and is seen as a sustainable competitive differentiation that will also be present in the forthcoming HBM4.
Additionally, Micron's positioning in what is described as a "2-horse" race in the HBM3E market segment was highlighted as a particularly favorable factor. Moreover, the company's TC-NCF packaging has been validated, offering good power and performance metrics that will carry into the HBM4 era.
The advancements in packaging and standards, such as the JEDEC height relaxation that allows for CoWoS-L to HBM4 with Hybrid Bonding, are anticipated to play a role in the technology's development up to the year 2028.
Mizuho's revised price target also takes into account the projected growth of the High Bandwidth (NASDAQ:BAND) Memory (HBM) market. The firm estimates that the HBM market will grow at a compound annual growth rate (CAGR) of approximately 65% to reach $17-18 billion by 2026.
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