JPMorgan forecast indicates HBM memory shortages will persist for at least two more years amid heavy accelerator demand

JPMorgan analyst Harlan Sur expects Micron Technology Inc. (NASDAQ: MU) to confirm strong memory pricing in its fourth-quarter earnings report, due September 30. Sur reiterated an Overweight rating and maintained a $1,540 price target, citing several opportunities for Micron to exceed current Wall Street expectations and raise its guidance.

The analyst forecasts August-quarter revenue, gross margin, and EPS will exceed Street estimates of $51.4 billion, 86.2%, and $31.73, respectively. Sur projects DRAM average selling prices will rise more than 20% sequentially, while NAND prices will increase approximately 20% as high-capacity enterprise SSD supply remains constrained. He expects the data-center business to exceed its May-quarter annualized revenue run rate of more than $100 billion, with data-center SSD revenue likely remaining above $5 billion. Additional upside may come from stronger-than-expected pricing, favorable product mix as HBM4 production ramps, and operating leverage.

For the November quarter, Sur expects Micron to guide above current consensus estimates of $56.3 billion in revenue, 86.5% gross margin, and $35.71 in EPS, citing stronger customer demand signals, management's view that 2027 could prove even tighter than 2026, and continued HBM4 production growth.

JPMorgan estimates the HBM market could reach $160 billion in 2027 and $282 billion in 2028. Sur expects Micron to target HBM market share roughly in line with its approximately 23% DRAM share. The firm's supply-demand analysis shows HBM shortages of 20% in 2026, 19% in 2027, and 16% in 2028, with cumulative shortages reaching 23 weeks by 2028. These constraints will maintain upward pricing pressure even after accounting for changes in HBM specifications.

Sur estimates Micron's SCA coverage could rise from over 35% of bit production to more than 50%, boosting visibility into pricing and volume. He projects August-quarter free cash flow to exceed $24 billion, up from $18.3 billion in the May quarter. Following the December 9 two-year anniversary of its CHIPS Act deal, Micron plans to return 100% of excess cash via share buybacks—a key catalyst as JPMorgan forecasts $200 billion in cumulative free cash flow through calendar 2027.

At the time of publication on Monday, Micron Technology shares were down 3.89% at $1,040.18.