As Micron Technology prepares to report its earnings for the latest quarter, analyst Tim Arcuri has released an update on his estimates. According to Arcuri, there are several factors that point to a favorable setup for the company.

Firstly, Aruri notes that Micron’s revenue and EPS estimates of $19.9 billion and $9.17, respectively, remain unchanged from previous updates. This is significant as it suggests that the company is on track to meet its guidance for the February quarter and exceed Street expectations.

The main driver of this growth appears to be better pricing, with Micron’s DRAM revenue expected to increase by 3% sequentially and its NAND revenue by 4%. Additionally, Aruri models revenue of $26.8 billion and EPS of $13.9 for the next quarter, which is a significant improvement over previous estimates.

While Micron did not provide any explicit pre-announcements ahead of its earnings report, management has provided some insight into the company’s performance. Specifically, there are signs that shortages in the market could extend beyond 2026, with DRAM being particularly affected. However, Aruri notes that Micron is already shipping HBM4, effectively one quarter early, and is pushing back against the view that it may need to rely on HBM3e for longer due to qualification delays at NVDA.

Overall, Aruri remains optimistic about Micron’s prospects and has maintained his buy rating with a price target of $475. While there are some concerns around the potential for shortages to extend into 2027 and 2028, Micron’s strong performance in recent quarters and its early adoption of HBM4 suggest that the company is well-positioned to continue growing its revenue and profits. As such, investors may want to consider Micron as a potential buy candidate ahead of its earnings report.