Up more than 50% since September, next week’s Micron earnings require a “strong HBM narrative” from the market.

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

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

Barclays analyst Tom O'Malley said that Micron will report results slightly better than the previous guidance midpoint and will provide even stronger guidance based on increased NAND flash shipments and average selling prices. The investment bank expects Micron's fourth-quarter revenue to reach $11.26 billion, up 21% quarter-on-quarter, slightly higher than Wall Street's expectation of $11.15 billion.

Analysts point out that although a turning point in NAND flash spot prices has not yet been seen, large-scale procurement activity has emerged in Silicon Valley after Broadcom's announcement, indicating a temporary growth. For the HBM business, Micron's market share is expected to increase further from the current "low 20%," with an additional 5% share contributing more than $2 billion in revenue.

Based on this, Barclays raised Micron's target price from $140 by 25% to $175, leaving 3.5% upside from the current price, maintaining an "Overweight" rating. The stock has gained over 50% since September and more than 100% year-to-date.

Short-term Improvement in NAND Business, eSSD Demand Driving Growth

Barclays raised expectations for Micron's NAND flash business, with fourth-quarter NAND revenue forecasts increasing from $2.28 billion to $2.32 billion, up 8% quarter-on-quarter, mainly driven by improved average selling prices (down 2% QoQ, better than the previous forecast of down 4%). The first quarter NAND revenue forecast was significantly raised to $2.56 billion, up 10% quarter-on-quarter, far exceeding the previous estimate of $2.25 billion.

It should be noted that this growth is defined as "temporary growth." Analysts noted that the hard drive market is much larger than the flash-based data center market (1100EB+ vs 200EB+); most future growth will still be met by hard drive technology transformation. In addition, most enterprise SSD product portfolios are based on around 100-layer NAND technology, and will not further limit the supply of NAND for PCs and smartphones.

The investment bank expects Micron's first-quarter NAND flash shipments to grow by 5% quarter-on-quarter (previously expected to decline by 5%), average selling prices to rise by 5% QoQ (previously expected to rise by 4%), and gross margin to improve from the earlier estimate of 29.4% to 31.5%.

Steady Increase in HBM Market Share, Optimistic Long-Term Outlook

For the high-bandwidth memory business, Barclays believes that this quarter is the most likely time for Micron to imply next year's increase in HBM market share, possibly supported by more aggressive capital expenditure guidance.

According to Barclays' data, Micron's HBM market share steadily increased over the past 12 months, rising from 6% in Q2 2024 to 19% in Q2 2025. Over the same period, SK Hynix's share dropped from 65% to 53%, and Samsung's increased from 16% to 38%.

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

Analysts point out that Micron's management may shift their wording from "we are confident we can sell out" to "we have sold out." During the quarter, Micron commented that the company is confident about selling out its 2026 HBM supply, which may be one reason for ultimately increasing capital spending to meet demand.

Comprehensive Upward Revision of Financial Forecasts, Enhanced Valuation Appeal

Barclays has comprehensively raised Micron's financial forecasts, increasing the 2025 fiscal year revenue/EPS estimate from $40.93 billion/$9.50 to $41.3 billion/$9.67, and the 2026 fiscal year forecast from $49.06 billion/$12.13 to $50.82 billion/$13.17.

The new $175 target price is based on 13.3 times 2026 EPS of $13.17, higher than the previous $140 target price, which was based on 11.5 times 2026 EPS of $12.13. Barclays said the target price hike is mainly due to improvements in the supply-demand and pricing environments.

In terms of capital expenditures, the investment bank expects Micron to maintain $14 billion this year, but next year that could rise to $16 billion, mainly for expanding DRAM capacity to meet HBM demand, while NAND spending is expected to be flat or decrease.

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