Shares of Micron Technology (MU) have surged to record highs this week, but some analysts warn the rally could face a narrative shift after Tesla CEO Elon Musk questioned one of the company’s biggest growth drivers: high-bandwidth memory (HBM).
Musk, in a recent post on X, suggested that HBM may be somewhat overrated. “You can fit more total RAM on the board if you use ‘normal’ memory than high-bandwidth memory, and it is super cheap,” he wrote.
Musk added that “using HBM isn’t the slam dunk many people think it is.”
The comments came in reference to Samsung’s Texas fab, where a decision on HBM adoption has yet to be finalized. While Musk wasn’t speaking directly about Micron, the remarks strike at the heart of investor enthusiasm for the chipmaker.
Micron is one of just three major suppliers of HBM, alongside Samsung and SK Hynix, and the technology has been viewed as a critical profit engine thanks to premium pricing and booming demand from Nvidia, AMD, and hyperscale cloud providers.
A large part of Micron’s stock surge has been fueled by the belief that HBM demand will continue to soar alongside the artificial intelligence buildout. If companies like Tesla pivot toward cheaper, denser alternatives, however, it could challenge the bullish consensus and weigh heavily on MU’s long-term narrative.
“Watch MU as Musk pours cold water on HBM,” cautioned stock analyst Trader 53 in a post on X.
That narrative shift, if it translates into real business impact, could deal a major blow to Micron. Analysts at Trefis estimate that HBM accounted for about 15% of the company’s $9.3 billion in Q3 revenue.
Micron shares are riding high... for now
Musk’s warning has yet to be reflected in Micron’s stock price, which has surged more than 30% over the past month to new all-time highs. Year to date, shares are up more than 87%, far outpacing the broader technology sector.
Analysts at Mizuho see further room to run, recently reiterating their “Outperform” rating with a price target of $182, about 15% above current levels.
Ironically, Mizuho’s bullish case rests heavily on Micron’s expanding HBM business, highlighting the company’s “HBM leadership, NAND/DRAM pricing power, [and] AI-driven demand.”
The analysts projected strong quarterly growth in Micron’s HBM sales, which is a trend likely to be reflected in the company’s earnings report next week.
Deutsche Bank analysts also raised their price target on MU to $175 while maintaining a “Buy” rating, citing expectations of strong earnings growth and tightening DRAM supply.
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