Micron’s Growth Potential: Buy Rating Backed by HBM and AI Market Expansion

Robert W. Baird analyst Tristan Gerra has maintained their bullish stance on MU stock, giving a Buy rating on March 18.

Tristan Gerra has given his Buy rating due to a combination of factors that highlight Micron’s potential for growth and profitability. One of the key reasons is the significant ramp-up in High Bandwidth Memory (HBM) and LPDDR5, which are expected to achieve 60% gross margins over time. This development is reminiscent of the early days of NAND flash and indicates a transformative phase for Micron, setting it apart from its historical performance. The increase in HBM’s Total Addressable Market (TAM) further underscores the strong demand and potential for margin expansion.
Additionally, Micron’s strategic engagements with major players like Nvidia in AI-specific architectures, along with its unique position as the sole supplier of LPDDR5, suggest a promising future in the AI market. The anticipated stabilization and slight increase in DRAM and NAND pricing in the coming quarters are expected to positively impact Micron’s gross margins. Furthermore, Micron’s recent financial performance, including its F2Q25 earnings surpassing guidance and optimistic revenue projections for F3Q25, reinforces the positive outlook and supports the Buy rating.

In another report released on March 18, Mizuho Securities also maintained a Buy rating on the stock with a $115.00 price target.