Micron Technology shares backed by Mizuho as HBM3e share set to hit 25% by 2025

On Monday, Mizuho (NYSE:MFG) reaffirmed its Outperform rating and a $135.00 price target for Micron Technology shares (NASDAQ:MU). The firm's analysis focused on the future of the DRAM and HBM (high bandwidth memory) industry, projecting significant growth and market share gains for Micron by 2025.

According to the firm's projections, the HBM3e segment is expected to expand approximately sevenfold to over $35 billion by 2026, with Micron's share in this market possibly reaching 20-25% in 2025 as it prepares to qualify its 12Hi HBM3e product by the end of 2024.

The firm also highlighted the potential for a 42% year-over-year increase in industry TSV (through-silicon via) capacity in 2025, with Micron anticipated to have the largest percentage increase. This expansion is part of the broader growth in overall DRAM bits, which are estimated to rise by 10% year-over-year in 2025, driven by advancements in HBM technology. The 12Hi HBM4 with 48GB is expected to start ramping up in the second half of 2025 and into 2026.

3D stacking technology is identified as a key driver for DRAM evolution beyond 2029. The firm's analysis suggests that this technology will continue to play a crucial role in the industry's development. In light of these industry trends, Mizuho has raised its fiscal 2026 top-line and EPS estimates for Micron, citing the anticipated revenue surge from HBM3e and strong margins through fiscal 2026. The firm also expects Micron to benefit from a rebound in shipping to meet NAND end-market demand.

In other recent news, Micron Technology has launched its 6550 ION NVMe™ SSD, the world's fastest 60TB data center SSD. This product showcases impressive performance and energy efficiency, setting a new benchmark for storage solutions. Micron's CEO, Sanjay Mehrotra, is also set to take over as Board Chair in 2025, following the retirement of the current Chair, Robert Switz.

In the global semiconductor sector, Vietnam is gaining attention as foreign companies, including Hana Micron and Amkor Technology (NASDAQ:AMKR), increase their investments. Citi analysts have expressed a positive outlook on the U.S. semiconductor sector, suggesting that the recent downturn is nearing its end. They recommend accumulating positions in semiconductor stocks, including Micron Technology.

Micron's 9550 PCIe Gen5 Solid State Drives (SSDs) have made it to NVIDIA (NASDAQ:NVDA)'s recommended vendor list, indicating a significant step for the company in the memory and storage market for AI and high-performance computing applications. Despite these positive developments, the company's operations could potentially be impacted by the anticipated intensification of US-China tech tensions following the upcoming U.S. presidential election.

InvestingPro Insights

Micron Technology's strong market position and growth prospects, as highlighted in Mizuho's analysis, are further supported by recent data from InvestingPro. The company's revenue growth has been impressive, with a 93.27% increase in quarterly revenue as of Q4 2024. This aligns with the projected expansion in the DRAM and HBM markets mentioned in the article.

InvestingPro Tips indicate that Micron is expected to see sales growth in the current year, which corroborates Mizuho's optimistic outlook on the company's future performance. Additionally, Micron is recognized as a prominent player in the Semiconductors & Semiconductor Equipment industry, reinforcing its potential to capitalize on the projected growth in the HBM3e segment.

However, investors should note that Micron is currently trading at a high P/E ratio of 145.64, which may reflect the market's high expectations for the company's future growth. This valuation metric underscores the importance of the projected market share gains and revenue increases discussed in the article.

For readers interested in a more comprehensive analysis, InvestingPro offers 12 additional tips for Micron Technology, providing a deeper understanding of the company's financial health and market position.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.