Micron Becomes the Sole U.S. HBM Supplier, AI Servers Cannot Do Without It
Every Blackwell rack, every hyperscale cloud provider's data center, and every agent-style AI workload relies on High Bandwidth Memory. Micron is currently the sole U.S. supplier of HBM. Therefore, the more Nvidia GPUs ship, the stronger the pull on demand for Micron's HBM4. The article thus suggests that Micron may have become the second most important AI stock after Nvidia.
Micron's current share price is approximately $932.97. The 12-month base target from 24/7 Wall St. is $959.72, implying only 2.87% upside, corresponding to a 'Hold' rating with 90% confidence. This cautious assessment does not deny the fundamentals but reflects that the stock price has already priced in a significant amount of positive news: it has risen 227.09% year-to-date and surged 702.68% over the past year, not far from its 52-week high of $1,254.81.
Revenue Skyrockets 346%, $100 Billion Take-or-Pay Agreements Reduce Cyclical Risks
For the third quarter of fiscal 2026, Micron's revenue reached $41.46 billion, a 345.72% increase year-over-year; non-GAAP earnings per share were $25.11, beating market expectations of $20.2843, and GAAP gross margin rose to 84.6%. The company expects fourth-quarter revenue to be $50 billion, plus or minus $1 billion, with EPS guidance of $31.
CEO Sanjay Mehrotra also disclosed that the company has signed 16 strategic customer agreements, containing approximately $100 billion in minimum price remaining performance obligations. These 'take-or-pay' type arrangements cover roughly half of its forward revenue, giving Micron higher price and order visibility compared to previous memory cycles. HBM4 revenue has already exceeded $1 billion, and its ramp-up speed is about twice that of HBM3E 12-high. Management expects industry supply-demand tightness to persist beyond 2027.
Bull Case Sees $1,333, Bear Case Could Fall to $702
In an optimistic scenario, the 12-month target could reach $1,333.56, representing a 42.94% increase from the current price; the average Wall Street target price is even higher at $1,515.11, with 9 analysts giving a Strong Buy and 31 giving a Buy. Nvidia's P/E ratio is about 43x, while Micron's is about 22x. If HBM growth continues, this valuation gap provides room for re-rating.
Risks are also evident. Micron's capital expenditure was $7.826 billion in Q3, is expected to be around $10 billion in Q4, and will continue to increase in fiscal 2027. Should major cloud providers cut HBM4 orders, customer concentration would amplify the impact. The bear case target is $702.60, implying a retreat of about 24.69%. The article's core judgment is: Micron's AI status and its 700% rise in a year can coexist; above the $1,100 level, unless HBM4E volume and pricing continue to materialize, the risk-reward becomes significantly less favorable, while a return to the $700 range would make its forward valuation more attractive.
