Why Micron Technology Stock Rebounded Monday Morning
The chipmaker has received some love from Wall Street analysts.
stock micron technology (M.U. 0.05%) It jumped 5% on Monday morning. As of 11:36 a.m. ET, the stock was still up 1.2%, but the rally had weakened somewhat.
The catalyst that boosted the memory and storage chipmaker’s stock price was a vote of confidence from Wall Street analysts.
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Key Bank Analyst John Vinh maintained an Overweight (Buy) rating on the stock and raised his price target to $150 from the previous level of $135. That’s on top of the stock’s 115% rise over the past year, suggesting a potential upside of about 21% from Friday’s close.
After the quarterly supply chain review, analysts became more optimistic about Micron’s prospects. Users report that Micron’s recently released High Bandwidth Memory 3E (HBM3E) chips offer “meaningfully better” thermal and power performance compared to competing products. Vinh believes this will put Micron in “pole position” and drive HBM sales to exceed $1 billion in 2024.
a secular tailwind
The analyst is likely onto something. At the end of last year, nvidia According to the company, it announced the integration of Micron’s HBM3E into its Tensor Core GPUs, providing “advanced memory capable of processing massive amounts of data for generative AI and high-performance computing (HPC) workloads.” Micron notes that these memory chips are already sold out for 2024, and a significant portion of the 2025 supply has already been mentioned.
The positive impact of AI is starting to have a dramatic impact on Micron’s results. During the second quarter of fiscal 2024 (ended February 29), the company generated revenue of $5.82 billion, up 58% year-over-year and 23% quarter-over-quarter. This is just the tip of the iceberg. For the fiscal third quarter, Micron expects revenue to hit $6.6 billion, a 76% jump from the previous year.
A recent surge in the stock price has increased Micron’s value, but it still trades at about four times next year’s expected sales. There is a bit of a premium compared to S&P 500With a 3x net sales multiple and strong demand for AI, demand for Micron’s memory and storage solutions is likely to continue to grow.
