Micron Technology stock is up 18 percent on Thursday after strong fiscal second-quarter results, but analysts believe the stock still has room to run. Micron’s revenue and profit topped Wall Street estimates in the latest quarter, and it also issued better-than-expected revenue guidance. Micron expects revenue of $6.6 billion in the third quarter ending in May, while analysts polled by LSEG forecast $6.2 billion. After Thursday’s gain, Micron shares are now 13% higher in 2024, after a 71% gain in 2023. MU YTD Mountain Micron Technology Stock. Micron’s role in providing flash storage and memory for computers, cell phones, and especially data centers puts the company at the forefront of the bull market for all things artificial intelligence. Massive data centers are a key part of powering AI software and projects. Looking ahead, Citigroup analyst Christopher Danielly believes that Boise-based Micron could ship $700 million worth of high-bandwidth memory (HBM) interfaces in 2024, and says its strong opportunities in artificial intelligence will drive its growth. Earnings will multiply by price. He also predicted a possible increase in demand for dynamic random access memory (DRAM) chips as another positive catalyst. Danieli pointed to Micron’s peers Broadcom and AMD, which saw their multiples increase by 120% from the start of 2023, as providing a baseline for Micron’s own multiple if the DRAM opportunity materializes. “We believe limited production growth and modest capex increases will make for a sustainable DRAM growth,” Danieli wrote in a report Thursday. “We expect the global DRAM market to be undersupplied in 2024,” he added. Citi maintained a Buy rating on Micron with a price target of $150 per share, which implies a nearly 60% upside from Wednesday’s close of $94. Danielle raised its full-year 2024 revenue and earnings estimates to $24.65 billion and 18 cents per share, respectively, from $22.53 billion and an expected loss of 58 cents. Citigroup called Micron its top pick in the chip industry, saying it expects the stock to sell for 15 times calendar 2025 earnings per share, which is higher than Micron’s “historical average but higher than AI peers.” will be less.” According to Goldman Sachs analyst Toshiya Hari, the recent slowdown in the memory market was more likely due to one-time factors that allowed Micron and its peers to benefit from a recovery in DRAM sales. “[W]e believe that the depth of the recent downturn has been driven by the pandemic (and the associated abnormal volatility in demand) and that the fundamentals of the DRAM industry as a whole are on a positive trajectory based on the cycle. Will come back,” Hari said. Goldman reiterated. On Thursday, it raised its buy investment rating on Micron and raised its 12-month price target by 9% to $122 a share from $112 previously.
