Micron’s Free Cash Flow Record Looms as HBM4 Output Doubles and Analysts Bid $1,100

Micron Technology sells out HBM capacity through 2026, ramps HBM4 twice as fast as prior gen, and eyes record free cash flow as AI demand surges.

The memory business is undergoing a structural shift, and Micron Technology is sprinting to capitalize. Production of its next-generation HBM4 chips has ramped twice as fast as the prior generation, according to Executive Vice President Manish Bhatia, and the company has already sold out its entire HBM capacity for the remainder of the 2026 calendar year. On the JPMorgan technology conference stage, management signalled that a record free cash flow is in play for the current fiscal third quarter — a milestone that would underline just how deep the AI-driven demand surge has become.

That demand surge is feeding a supply chain already stretched to the limit. ASML CEO Peter Wennink noted on May 20 that the global semiconductor industry faces a prolonged period of constrained output, with AI orders consistently outpacing factory capacity. For memory makers, this translates into robust pricing power. The situation could tighten further: reports from South Korea suggest that Samsung’s memory division is on the brink of a strike after union wage talks collapsed, threatening to crimp output from the world’s largest memory manufacturer.

Wall Street analysts have responded in kind. Citigroup doubled its price target on Micron to $840 while keeping a “Buy” rating. Melius Research went a step further, setting a $1,100 target and citing “unprecedented” AI-related demand. The stock has already surged more than 140% year to date, closing on Thursday at €656 — just 4% below its 52-week high and a far cry from the €82 low set in May 2025.

Micron’s latest quarterly results give ample reason for optimism. Fiscal second-quarter revenue hit $23.86 billion, a 196% jump from the $8.05 billion posted a year earlier. The company guided for around $33.5 billion in the current period. The cash flow record flagged by management, if confirmed, would mark another inflection in a cycle that shows no signs of easing. CEO Sanjay Mehrotra has projected the AI infrastructure market will balloon from $35 billion in 2025 to $100 billion by 2028, with DRAM, NAND and HBM supply constraints expected to persist beyond 2026.

To keep pace, Micron is fighting for engineering talent on Samsung and SK Hynix’s home turf. The company has posted job openings in Seoul specifically targeting HBM architects from its Korean rivals. Senior roles offer salaries of up to 300 million won—roughly $214,000 including bonuses—as Micron seeks to build specialised expertise without requiring engineers to relocate.

The company has also begun commercial shipments of its 245-terabyte SSD, the 6600 ION series, designed for AI and hyperscale workloads. Meanwhile, its existing HBM capacity for 2026 is fully locked in via long-term contracts with major cloud providers, and the faster HBM4 ramp — double the speed of the HBM3E transition — suggests Micron is gaining a competitive edge. All eyes will be on June 24, when the company formally reports its fiscal third-quarter numbers and, with luck, delivers on that promised cash flow record.