UBS analyst Timothy Arcuri says Nvidia has moved to "de-spec" its upcoming Rubin Ultra chip, testing versions with less memory because of tight high-bandwidth-memory supply. The shift could still raise total HBM demand in 2027 above earlier forecasts, a potential boost for supplier Micron Technology, which Arcuri says is entering a structurally stronger earnings position.
UBS analyst Timothy Arcuri wrote Monday that he believes Nvidia has moved to downgrade certain capabilities on its upcoming Rubin Ultra chip — a practice known as "de-spec." The Information reported that Nvidia is testing different versions of the chip with less memory because of concerns over high-bandwidth-memory supply. Arcuri said the change could lead to higher overall consumption of HBM in 2027 than previously forecast — a shift that could benefit Micron Technology.
The result could mean less HBM content per chip but more chips in the supply chain overall, Arcuri said. Nvidia did not immediately respond to a request for comment about Rubin Ultra.
Tighter HBM supply pushes pricing higher
HBM supply is tightening, and pricing for HBM4 and HBM4E chips is even stronger than UBS had previously expected, Arcuri wrote in a note. Micron's leadership in dynamic random-access memory has made it one of the top HBM producers, alongside South Korea's SK Hynix and Samsung Electronics.
Arcuri said memory suppliers are rewidening the price premium for HBM, which could push average selling prices up about 79% from a year earlier — above his earlier estimate of a 67% increase.
NAND demand offsets PC-market weakness
Contract pricing for NAND flash memory is also trending upward, which Arcuri attributed to better-than-expected demand for server and storage solid-state drives that is helping offset weakness in the personal-computer market. Sequential growth in NAND average sales prices may not be as strong as he first estimated, but according to UBS analyst Timothy Arcuri: "the demand backdrop remains constructive". He raised his forecast for bit demand growth in the NAND industry to 23% this year and 26% in 2027.
Micron's earnings power could re-rate its stock
Arcuri expects Micron's earnings per share to stay above $160 in 2029, and he projects the company could generate more than $450 billion in cumulative free cash flow through 2028. That level of durability, he wrote, looks like a structural reset in Micron's earnings power — one that could push the stock toward a broader valuation multiple, more in line with the rest of the chip sector.
Micron shares were up fractionally Monday afternoon and have gained 209% so far this year, at last check.
Tight supply seen persisting beyond 2027
Micron's chief business officer, Sumit Sadana, said Monday at the KeyBanc Technology Leadership Forum that tight supply is likely to persist beyond 2027 as customer demand keeps rising. He said memory demand in the AI era is different from past industry booms because AI technology is still improving quickly in its early stages.
Sadana said growing demand for HBM has pressured wafer supply for other memory components, and expanding that supply is not easy because it requires lengthy capacity buildouts. Customers in Micron's data-center segment and elsewhere are still seeking more product despite rising memory prices, he added.
Source: MarketWatch
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