Micron CFO confident in HBM, memory stocks surge across the board

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Micron executives made optimistic remarks about the competitiveness of the next-generation high-bandwidth memory chips at an industry conference, alleviating market concerns over its lag in the HBM4 field compared to competitors. Combined with Wall Street analysts raising target prices, this has driven overall strength in the memory chip sector.

Overnight, Micron CFO Mark Murphy stated at the conference that the company has begun mass production and shipment of HBM4 chips. “We are very excited about HBM’s performance,” Murphy said. This statement directly addresses market concerns that Micron may be falling behind SK Hynix and Samsung Electronics in the HBM4 competition.

Morgan Stanley analyst Joseph Moore on Wednesday sharply raised Micron’s target price from $350 to $450, maintaining an overweight rating. Moore pointed out that while SK Hynix will supply HBM4 products to Nvidia in the first quarter of this year, Micron should be able to achieve the same goal starting from the second quarter.

The surge in demand for HBM chips has been a major driver of Micron’s more than tripled stock price over the past 12 months. On Wednesday, Micron’s share price rose 6.6% to $410.34. Confirmation that the company has achieved mass production and commercial shipment of HBM4 marks that Micron’s progress in this critical technology area is meeting expectations.

Micron’s sharp rise has driven strength across the memory chip sector. SanDisk saw an intraday gain of up to 13.20% overnight, Western Digital rose 4.26%, and Seagate Technology closed up 2.88%.

Mass Production Progress Dispelled Market Concerns

HBM4 is the next-generation high-bandwidth memory technology and is crucial to supporting cutting-edge AI chips from companies like Nvidia. Previously, the market worried that Micron could be overtaken by Korean competitors in this field, impacting its share in high-margin product markets.

Moore of Morgan Stanley pointed out in a research report that although SK Hynix will supply HBM4 to Nvidia in the first quarter, Micron will also be able to achieve delivery from the second quarter, with no significant time gap.

Moore expects a new round of price hikes to occur in the first quarter, and the supply growth in 2026 is unlikely to alleviate the anticipated severe shortage. "We expect prices to continue to rise throughout the year," he wrote.

Karl Ackerman, Senior Analyst at BNP Paribas Securities Research, believes that concerns about Micron's HBM4 position have been overly amplified. He pointed out that even if Nvidia does not initially allocate HBM4 orders to Micron, it may balance the supply chain by ordering other memory components.

Strong demand for HBM chips has led to shortages of other types of memory chips, driving up industry-wide prices. Ackerman analyzed that if Micron replaces 20% of HBM4 share with 20% of LPDDR5X module share, the profits generated in Nvidia's Vera Rubin computers would be comparable.

This supply and demand pattern has created a favorable pricing environment for memory chip makers such as Micron. The high profit margin nature of HBM chips makes them a key product line driving Micron's performance growth.

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