Shares of Micron Technology (MU) are down at the time of writing after Goldman Sachs (GS) downgraded its South Korean competitor, SK Hynix, from a Buy to a Hold rating. Although the downgrade was specifically for SK Hynix, it created worries for the memory chip industry as a whole, especially for companies like Micron that compete in the same high-bandwidth memory (HBM) space. As a result, investors reacted by re-evaluating the potential challenges that are ahead for chipmakers involved in HBM.
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Indeed, Goldman Sachs analysts, led by Giuni Lee, warned that HBM prices could start falling in 2026 as competition increases. SK Hynix, a key supplier of HBM to Nvidia (NVDA), could be particularly impacted if customers like Nvidia begin to gain more pricing power. Lee also noted that this would be the first time that HBM prices may decline, which would cause suppliers to lose some control over pricing. Since Hynix has a lot of exposure to this segment, the downgrade has raised concerns about how profit margins could be impacted going forward.
And while Micron wasn’t directly downgraded, the warning about declining HBM prices could apply to them as well. Along with Samsung (SSNLF), Micron is one of the major producers of HBM. If prices drop across the board, Micron’s margins may also come under pressure, even as it continues to invest in AI-related growth. In addition, it is worth mentioning that four-star Goldman Sachs analyst James Schneider recently assigned a Hold rating on Micron, which is in line with the firm’s overall view of the industry.
Is MU a Good Stock to Buy?
Overall, analysts have a Strong Buy consensus rating on MU stock based on 22 Buys, three Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average MU price target of $154.96 per share implies 37.1% upside potential.
