Micron stock price: Micron stock rises 7% as expected on rapid recovery in chip demand
The company’s quarterly results on Wednesday beat market expectations, and it forecast a strong February quarter in a clear sign that memory chip prices will recover from a months-long slump and improve next year.
Shares rose to $85.99 on Thursday, hitting a nearly 21-month high. It has gained about 60% this year in anticipation of an industry recovery.
Micron said inventory for most customers across the personal computer, mobile, automotive and industrial markets is at or near normal, and data center inventory will reach that level in the first half of 2024.
“The market rebound is occurring earlier than previously thought,” Morningstar analysts said.
Micron’s optimistic results and forecasts for the current quarter, which ended Nov. 30, have fueled similar expectations from other chip companies to report early next year, boosting their stock prices.
The Philadelphia SE Semiconductor index rose 2%, led by gains in shares of companies such as Nvidia, Advanced Micro Devices, Qualcomm, Intel and Broadcom. Micron also said it was in the “final stages” of qualifying its high-bandwidth memory chips for use in Nvidia’s most powerful AI platform.
These advanced memory chips are among Micron’s most profitable products and will generate “hundreds of millions of dollars” in sales in fiscal 2024, the company said.
Analysts expect AI-driven demand to help Micron rebound.
Piper Sandler analysts wrote that increased demand for these chips “is likely to be a tailwind for Micron (MU) for at least the next two quarters and beyond.” At least 12 brokerages raised their price targets following the results, according to LSEG data. Micron’s forward price-to-earnings ratio for the next 12 months is 32.45, compared to the industry’s 21.03.
