Micron Technology Inc. (NASDAQ:MU) is riding an AI-fueled memory squeeze, with JP Morgan saying demand for DRAM, especially HBM, should continue to outstrip supply past 2026, keeping pricing firm and reinforcing its bullish stance on the stock.
JP Morgan analyst Harlan Sur said his team hosted an investor group meeting with Micron’s CFO Mark Murphy, CBO Sumit Sadana, and Senior Director of Investor Relations Samir Patodia.
Sur reiterated an Overweight rating on Micron with a price forecast of $350.
The analysts said management struck a bullish tone on demand for both DRAM and NAND, citing customers “upsiding” memory and storage needs.
He said recent Graphics Processing Unit (GPU) and eXtreme Processing Unit (XPU) trends support that view, pointing to Nvidia Corp. (NASDAQ:NVDA) indicating additions to the $500 billion+ Rubin and Blackwell backlog through year-end calendar 2026, and to Tensor Processing Unit (TPU) volumes for Broadcom Inc. (NASDAQ:AVGO) continuing to move higher, alongside JP Morgan’s increased CoWoS capacity forecasts tied in part to expectations of higher TPU volumes.
Sur added that Micron remains constrained in its ability to grow supply and meet incremental customer demand because it lacks available clean-room space.
Even so, he said node transitions, production efficiency improvements, and accelerated yield ramps should collectively drive at least 20% growth in bit shipments for both DRAM and NAND in calendar 2026.
He said that still does not fully bridge the gap to demand growth, which JP Morgan expects to run at 30%+ year over year, but he noted it marks an improvement from supply growth expectations even 90 days ago.
Pricing Support Builds As DRAM And HBM Demand Outruns Supply
Sur said he expects DRAM/HBM demand to outstrip supply beyond 2026 even as new capacity comes online, a setup he said underpins further strength in pricing.
He said management reiterated Micron can only serve 50% to two-thirds of key customers’ medium-term bit demand and added that demand will likely continue to exceed supply even as greenfield clean-room capacity starts to come online in calendar 2027.
He noted Micron has pulled forward the timing of first wafer-out for its Idaho 1 fab by about one quarter to mid-calendar 2027, but management expects the ramp of that greenfield capacity to be gradual because of physical limitations rather than capital constraints.
Sur said Micron expects competitors to face similar gradual ramp dynamics as they bring greenfield capacity online in late 2027 and 2028, while demand continues to rise.
He said JP Morgan expects this supply-demand tightness to support pricing strength through calendar 2026 at a minimum, with JP Morgan forecasting average DRAM pricing up almost 60% year over year in calendar 2026.
New AI Workloads Expand NAND Demand And Fuel Longer-Term Upside
Sur said Micron sees context window memory management as a rapidly growing demand vector for NAND.
He said management viewed Nvidia’s CES announcement of its new Inference Context Window Storage platform as unsurprising because hyperscalers and others with in-house AI XPU infrastructure have already deployed, or are developing, KV cache management systems to manage rapidly growing context windows and offload from HBM and system memory.
Sur said this trend could open another swim lane for NAND bit demand growth, with attach rates for Nvidia’s Bluefield-4 based system likely to be high.
He added that Micron does not expect KV cache offload efforts to impact customers’ HBM roadmaps, which are already in place for the next couple of years.
Sur also said Micron expects physical AI, and robotics in particular, to become a “massive” demand driver for memory, following closely on the heels of generative AI and potentially representing a significant proportion of overall industry demand in the future.
He said management described customer plans as “incredible” in scale and pointed to implied memory needs, citing an example in which a leading edge humanoid robot utilizes upwards of 64–128GB of DRAM and 1–2TB of NAND, with both figures likely to rise over time.
Sur said scaling that across millions of units would imply significant incremental DRAM and NAND demand.
MU Price Action: Micron Technology shares were down 3.51% at $327.62 at the time of publication on Thursday. The stock is approaching its 52-week high of $346.30, according to Benzinga Pro data.
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