Micron (NASDAQ:MU) has started 2026 much the way it ended 2025 – with strong upside momentum. Just one week into the new year, the stock is already up about 20%, extending its 236% gain over the past 12 months. The rally reflects rising confidence in Micron’s outlook as AI-driven demand continues to reshape the memory market and lift expectations for earnings power.
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For investors concerned that the stock has already surged too high, recent commentary from Piper Sandler analyst Harsh Kumar, following a management meeting at CES, may help ease those fears.
“We continue to view the company as extremely well positioned as demand should continue to outstrip supply,” said Kumar, who ranks at 8th spot among the thousands of Street stock experts.
Micron has reiterated multiple times that its calendar 2026 capacity is fully booked. Currently, the company is working with six customers in its HBM segment. Management also highlighted that pricing for premium products, including HBM4 set to launch in 2Q26, will be “value derived.” Although no specific figures were given for expected price increases in 2026, management indicated that market conditions are likely to stay tight beyond 2026. “We believe this implies that pricing will stay positive throughout the year,” the 5-star analyst opined.
Management also highlighted the difficulties in expanding capacity at the current process nodes. Adding incremental supply requires new clean-room space to handle finer line widths, while further shrinking existing nodes is increasingly challenging. As a result, the industry is witnessing a rise in multi-year agreements, reflecting both the growing importance of memory and the engineering hurdles of current generations. This dynamic applies to products such as LPDDR and HBM. Consequently, customers are seeking multiyear supply commitments. Micron is expected to increase supply by roughly 20% in 2026 compared with 2025, driven by node transitions and “tremendous efforts to increase supply.”
Additionally, trade ratios are adding incremental pressure on supply, as they reflect how much standard DRAM capacity must be consumed to produce a unit of HBM. For the current HBM generation, HBM3e carries a trade ratio of 3-to-1, while HBM4e is expected to increase to a 4-to-1 ratio, meaning each generation absorbs more effective capacity. HBM4 trade ratios are expected to fall between those of HBM3e and HBM4e, further tightening supply. Micron has also exited certain low-value consumer markets and continues to evaluate these parameters as part of its efforts to create additional capacity.
“Overall,” Kumar summed up, “Micron appears to be extremely well positioned throughout 2026 and, to some degree, beyond. All incremental signals point to a strong 2026.”
Reflecting that confidence, Kumar assigns MU shares an Overweight (i.e., Buy) rating, while raising his price target from $275 to $400, suggesting the stock will gain another 17% over the coming months. (To watch Kumar’s track record, click here)
Zooming out, Wall Street remains firmly in Micron’s corner. The stock carries a Strong Buy consensus, backed by 25 Buy ratings versus just 2 Holds. That said, Micron’s surge has already pushed shares past the $329.73 average price target. It will be interesting to see whether other analysts increase their targets shortly. (See MU stock forecast)
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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.