Micron Stock: Morgan Stanley Stays Cautious Ahead of FQ4 Readout

Micron (NASDAQ:MU) has been getting a lot of love recently. Shares of the memory giant been on a big runup – up by 29.5% over the past month and 90% year-to-date – and notching new highs, backed by growing confidence the company is positioned extremely well in the AI game.

But it’s not universal bullish sentiment. In fact, Morgan Stanley’s Joseph Moore, an analyst ranked amongst the top 3% of Street stock experts, thinks Micron has become an “incredibly noisy story, as bearish sentiment is echoed in many of our meetings, while the stock keeps marching higher.”

The thing is, Moore thinks it can go higher still. “Given the move in the stock, we see the risk reward as fairly balanced – but still with something of a constructive bias, not because the stock is undervalued – but because it can get to overvalued if enthusiasm comes back to the high bandwidth memory opportunity,” the 5-star analyst went on to say.

Heading into company’s August quarter (FQ4) report next Tuesday (September 23), there are indications of strong DRAM and NAND pricing.

DDR5 and DDR4 (both types of DRAM, used for system memory) have seen sharp price increases. DDR5 is rising due to strong demand across phones, PCs, servers, and AI, with supply tightness expected into 1H26. DDR4 prices have spiked, Moore thinks mainly because of Intel pushing parts of its PC roadmap back, tightening supply, though it’s a small revenue segment for Micron. NAND (flash storage used in SSDs) is also up, driven by strong enterprise SSD demand and concerns over 2026 supply.

But if that all sounds like Moore is of a bullish bent, that isn’t really the case, as the analyst says there are more “cautionary elements of the tale,” particularly around what’s considered the big AI tailwind: HBM (high bandwidth memory).

While the analyst downplays current oversupply, Moore says that excess wafer capacity across the DRAM industry could eventually lead to oversupply in all segments, including HBM. Moreover, Moore still thinks HBM market projections are “far larger than the implied processor revenue,” creating a potential catch-up period if the ramp doesn’t meet expectations. Micron also faces execution risk, as the company is still early in managing reliable yields and may have built slightly more capacity than the market requires. That said, Moore does think it “should work out fine,” and believes Micron is strategically well-positioned in the market.

While Micron continues to be “highly confident in their position,” the overall conclusion from Moore ahead of the print is that for the stock to move higher, there will need to be “more clarity” on Micron’s HBM position. “New company segmentation can help, with Micron to begin reporting a new cloud segment, which will include HBM and large hyperscale customer revenue, and we do expect to get some clarity. But HBM/AI needs to be an element of why it’s different this time for the stock to move higher,” the 5-star analyst summed up.

Bottom line, Moore’s stance advocates caution right now. The analyst maintained an Equal-weight (i.e., Neutral) rating on the shares, backed by a $135 price target, implying the stock is overvalued by 16%. (To watch Moore’s track record, click here)

3 other analysts join Moore on the fence, yet with an additional 25 Buys, the stock claims a Strong Buy consensus rating. However, the $157.33 average target suggests the stock is fully valued. Considering the discrepancy, watch out for either price target hikes or rating downgrades shortly. (See Micron stock forecast)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.