Micron Technology (MU, Financials) a semiconductor company that makes memory and storage chips used in data centers, computers, phones and AI systems, kept its Buy rating at UBS after the firm raised its memory pricing forecasts for the rest of 2026.
UBS now expects DDR contract prices to rise 32% from the previous quarter in the third quarter, nearly double its earlier 17% forecast. Fourth-quarter pricing is expected to increase 18%, up from a previous estimate of 12%.
The reason is a memory market that remains tight. UBS expects DRAM demand growth of 36.2% in 2027, compared with supply growth of just 19.3%. The firm believes the industry could remain undersupplied until at least the second quarter of 2028.
NAND pricing is also improving. UBS raised its third-quarter forecast to 30% growth from 17% and expects the NAND upcycle to continue through at least late 2027.
For Micron investors, stronger pricing could provide support after the stock's recent pullback. The shares have fallen about 15% over the past week despite a sharp rise during the past year.
UBS now sees memory industry revenue reaching $992 billion in 2026 and $1.76 trillion in 2027. The next question is whether hyperscalers can keep funding the heavy AI spending driving memory demand.