Micron Stock Price Forecast: HSBC, Daiwa Say Market Overestimates CXMT Impact, View Recent Pullback as Buying Opportunity

TradingKey - On October 15, US Eastern Time, Micron (MU) shares turned from losses to gains, after intraday trading dropped more than 6% to a low of $858, hitting the lowest level since August 11.

Recently, technological progress by ChangXin Memory Technologies (CXMT) triggered market concerns about the DRAM competitive landscape. However, both HSBC and Daiwa believe the short-term impact may be overestimated, while Elon Musk's endorsement of Micron's pricing strategy offers another perspective on its long-term customer relationships.

HSBC pointed out that ChangXin Memory Technologies (CXMT) is expected to complete the development of server DRAM based on the 4F² cell structure by the end of 2026, 2 to 3 years ahead of South Korean manufacturers. However, because relevant JEDEC standards have not yet been established and long-term verification by CPU vendors is still required, the impact on memory prices and industry structure will be limited over the next 2 to 3 years. HSBC maintains a Buy rating on SK Hynix and Micron, believing both will benefit from the memory upcycle and growing AI demand, while the recent pullback has also improved the risk-reward ratio.

Daiwa Securities also believes the market overreacted. The firm noted that CXMT plans to launch DDR5 RDIMM modules featuring a new-generation 4F² DRAM architecture this year, sparking market concerns about a narrowing competitive gap in high-end server DRAM, but industry fundamentals remain solid. Daiwa views the recent pullback as a buying opportunity, noting that earnings growth driven by AI data center demand and enhanced shareholder returns will serve as major stock price catalysts.

In addition, on October 13, Musk stated on platform X that Micron's handling of future memory pricing is relatively rational, whereas other vendors quoted prices that were too high, and customers would not forget this difference. He noted that Micron's move "is a smart step to win long-term customer loyalty."

Micron four-hour candlestick chart, Source: TradingView

It should be noted that despite the rebound in Micron's share price today, technical analysis shows that the current price remains below the 0.5 Fibonacci retracement level ($923.25) and has not yet returned to the previous ascending channel. The current move represents a sharp rebound following a channel breakdown, rather than a restoration of the original uptrend or the formation of a clear bottom reversal.

After losing the 0.382 Fibonacci retracement level ($967.00) and the 50% retracement level, the price further probed below the 0.618 retracement level before recovering. The current rally demonstrates buying support at lower levels, but the 50% retracement level has yet to be reclaimed, leaving the recovery incomplete.

Furthermore, the current stock price is below all moving averages, with short-term moving averages fanning downward; however, the 80-period moving average remains above the 160-period moving average, indicating it is not a complete bearish alignment.

Regarding upside potential, the immediate resistance to watch is the 5-day moving average ($934). If the stock price successfully holds above this level, the next target will be the resistance zone formed by the 10-day moving average ($963.9) and the 0.382 Fibonacci retracement level ($967).

It should be noted that until the stock price rebounds strongly to the lower boundary of the ascending channel at around $996 to $1,011, any upward move should be viewed as a price bounce rather than a return to an uptrend.

Regarding support levels, the 0.618 Fibonacci retracement level ($879.50) is close to the consolidation and retest area from August to September, making it the primary support level for judging whether this recovery can be sustained.