10:39 AM EDT, 07/10/2025 (MT Newswires) -- Micron Technology ( MU ) could see significant long-term growth supported by expanding High Bandwidth Memory revenue and constructive demand trends, Deutsche Bank said in a note Thursday.

High Bandwidth Memory, or HBM, is expected to play a major role in improving performance in next-generation AI processors, which should support higher DRAM, or dynamic random-access memory, sales and profitability.

HBM revenue could account for about 23% of Micron's total sales by 2026, up from nearly zero in 2023, and HBM gross margins are expected to be significantly higher than the company average, according to the bank.

DRAM, which represents roughly 75% of Micron's business, should benefit from growing demand and better pricing, driven by higher memory content per device and a healthy supply-demand balance. The outlook for NAND is weaker, with fewer growth drivers and a less favorable supply-demand environment, according to the note.

The firm's 2026 revenue and earnings estimates are about 3% and 8% above Wall Street consensus, at $51.7 billion and $14.00 per share, respectively.

Even after a 48% year-to-date gain in the stock, Deutsche Bank sees further upside, noting shares still trade around 9 times estimated 2026 earnings, which the firm views as conservative.

Deutsche Bank initiated coverage of Micron with a buy rating and a $150 price target.

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