Deutsche Bank raises Micron price target ahead of earnings next week

Deutsche Bank has raised its price target for Micron Technology to $175 from $155 and reiterated a 'buy' rating ahead of the company's fiscal fourth-quarter earnings, citing expectations of tight dynamic random-access memory (DRAM) supply into 2026, which should drive healthy average selling price growth and gross margins above 50%. Analyst Melissa Weathers also expressed confidence in Micron's High Bandwidth Memory (HBM) business, dismissing 2026 pricing concerns and forecasting Q4 revenues of $11.5 billion, surpassing both consensus estimates and company guidance due to favorable memory demand-supply dynamics and HBM's increasing importance in AI applications.

Analysis

Deutsche Bank has materially increased its price target on Micron (MU) to $175 from $155, reiterating a buy rating and signaling an 11% potential upside from recent levels. The core of this bullish thesis rests on the expectation of sustained supply tightness in the dynamic random-access memory (DRAM) market extending into 2026, which is projected to fuel healthy average selling price (ASP) growth and expand gross margins to over 50%. The bank's analyst also highlights Micron's strong positioning in the high-growth High Bandwidth Memory (HBM) segment, crucial for AI applications, dismissing recent market concerns over 2026 pricing as 'overblown'. In the near term, Deutsche Bank is modeling fiscal fourth-quarter revenues of $11.5 billion, a figure that surpasses both Wall Street consensus of $11.1 billion and the company's own guidance of $11.2 billion. This optimistic forecast, set against a backdrop of an 87% year-to-date share price surge, is based on favorable supply-demand fundamentals and a potential for further multiple expansion.

Key Decisions for Investors

• Given the strong conviction on sustained DRAM supply tightness and HBM profitability, investors could view the 11% upside to the new $175 price target as a baseline for a bullish position, with potential for further multiple expansion if the HBM scenario materializes.
• Monitor the upcoming fiscal fourth-quarter earnings report on September 23rd, as a revenue figure beating the high end of guidance ($11.3 billion) would validate Deutsche Bank's thesis and could act as a significant near-term catalyst.
• Despite the positive outlook, investors should acknowledge the stock's 87% year-to-date rally, which suggests high expectations are already priced in, making the equity vulnerable to any negative surprises in earnings or future guidance.