Micron poised for "structural reset" in earnings power, UBS says, as HBM squeeze tightens further

Micron poised for "structural reset" in earnings power, UBS says, as HBM squeeze tightens further

Micron Technology Inc ( NASDAQ:MU ) 's earnings power looks headed for a structural reset, according to UBS, which pointed to memory supply so tight that Nvidia was forced to de-spec its upcoming VR300 GPU.

UBS said Nvidia was forced to scale back the amount of high bandwidth memory, or HBM, in each VR300 GPU due to tight supply, cutting planned content to 512GB of HBM4E per chip from 768GB. VR300 is part of Nvidia's upcoming Rubin Ultra lineup of AI accelerators.

The reduced memory content lets Nvidia build more GPUs with the same constrained memory supply, and the bank said the resulting increase in VR300 shipments is significant enough to lift its overall 2027 HBM consumption estimate to 61.5 billion gigabits, up from a prior 58.7 billion.

The bank also pointed to a re-widening of the price premium between HBM and DDR DRAM, a trend it said it has been highlighting since April. UBS now models 2027 industry blended HBM average selling price up approximately 79% year over year, compared with a prior estimate of 67%, with HBM4E likely to reach more than $30 per gigabyte.

On NAND, UBS said third-quarter contract pricing continues to trend positively as server and storage SSD demand offsets weakness in smartphones and PCs, though the magnitude of quarterly price increases is tracking modestly below its prior expectations.

The bank raised its NAND industry bit demand growth forecasts to 23% for 2026 and 26% for 2027, and now forecasts industry NAND revenue of approximately $300 billion in 2026 and $495 billion in 2027.

For Micron specifically, UBS adjusted its earnings per share estimates fo...