Phillip Capital has opened coverage on Micron Technology Inc with a Buy recommendation, arguing that a pronounced shortage in memory chips is elevating DRAM prices to levels not seen since 2019. The broker pointed to sustained demand for high-bandwidth memory products as a central factor underpinning Micron’s revenue outlook.
According to Phillip Capital, demand for Micron’s HBM lineup is robust, with HBM shipments fully committed for 2026 alongside those from market leader SK Hynix. The firm noted that industry supply constraints, together with continued investment in AI infrastructure, are creating upward pressure on DRAM pricing - a trend the analyst expects to accelerate through fiscal 2026.
Phillip Capital highlighted that Micron’s HBM3E parts are already integrated into Nvidia’s Blackwell GPUs and AMD’s MI355 GPUs, which the firm said supports solid revenue growth. The analyst also flagged Micron’s next-generation HBM4 as a potential turning point for the company. HBM4 is projected to begin ramping in the second quarter of 2026 and offers per-pin speeds above 11 gigabits per second, which Phillip Capital stated are higher than estimates for competing parts. The firm suggested that once HBM4 volumes scale, this performance advantage could enable Micron to take share from SK Hynix.
The broader market context remains tight, the analyst added. DRAM prices have increased for eight consecutive quarters, and both Micron and SK Hynix have indicated that their HBM output is fully committed for the coming year. While combined capital spending by the two suppliers rose late in 2025, Phillip Capital expects overall capex intensity to moderate in 2026. The firm specifically anticipates a reduction in Micron’s capex intensity ahead of new fabrication facilities planned for 2027. That moderation, Phillip Capital said, should help keep supply constrained and support elevated pricing.
Phillip Capital also pointed to visible demand from large cloud providers. The analyst cited guidance from Meta and Microsoft indicating significant increases in capital spending in 2026 to support AI workloads, a dynamic the firm believes reinforces demand for advanced memory products.
Micron’s substantial U.S. manufacturing presence was described as an advantage in the analysis. The company has secured funding and tax incentives under the CHIPS Act, which Phillip Capital said should materially reduce long-term costs as new fabs are brought online.
Based on its fiscal 2026 earnings outlook and the combination of DRAM price strength, tight supply and Micron’s strengthening position in high-bandwidth memory, Phillip Capital set a $500 price target on the stock.