Micron Technology — Initiation of Coverage
Published · Dilikoglu Research
- Company / ticker
- Micron Technology / MU
- Recommendation
- BUY · High risk
- Price target
- $1,360 USD · 12–18 months
- Reference price
- $903.70
- Reference date
- 2026-10-26
- Implied upside to target
- 50.5%
Base intrinsic value of $1,360.22, rounded to the nearest $5. Probability-weighted value is $1,227.05; this is a Base-case realization target, not a guaranteed return. Dated reference, not a live quote.
Executive summary
We initiate Micron with BUY · High risk and a $1,360 target, implying 50.5% upside to the October 26 close of $903.70. The investment case depends on the duration of strong memory pricing, HBM delivery and cash returns after reinvestment.
Key investment thesis
- Base follows FY27 Q1 management guidance; later quarterly and annual forecasts are DR estimates.
- HBM remains inside DRAM, with shared wafer constraints and a separate packaging ceiling.
- Pricing normalization begins in FY29 in Base; an earlier reversal and weaker volume growth materially reduce value.
Target and rating methodology
BUY above +15% target return; SELL below -15%; otherwise HOLD. Target rounds Base to nearest $5; dividends excluded.
Scenario valuation at publication
Model effective 2026-10-26. Frozen publication snapshot; USD per share. Subsequent model updates appear on the Coverage page.
| Scenario | Probability | Fair value |
|---|---|---|
| Failure | 10% | $100.23 |
| Bear | 25% | $483.78 |
| Base | 45% | $1360.22 |
| Bull | 20% | $2419.91 |
Probability-weighted fair value: $1227.05. This is separate from the report target.
Key operating assumptions
- FY27 Base revenue
- $262.41bn; DR estimate
- Net capex
- $54bn FY27 floor; DR estimate
- Valuation
- 10% WACC, 3% terminal growth, 16% terminal ROIC; DR estimates
Primary catalysts
- Delivery against Q1 guidance and HBM qualification milestones.
- Packaging and manufacturing ramps supported by cash returns.
Principal risks and thesis breakers
- Earlier pricing normalization, supply expansion and customer concentration.
- Capital intensity, contract uncertainty and simplified asset/share schedules.
Persistent ASP or margin misses, delayed packaging ramps, or capital spending without adequate cash returns.
Current evidence review and open items →Report-specific conflicts disclosure
Tugay Dilikoğlu reports no Micron securities holdings, other material interest in Micron, or compensation from Micron or any third party for this research.