Micron stock dips as Wells Fargo notes Samsung’s HBM3E qualification

Investing.com - Micron Technology (NASDAQ:MU) stock fell 2% following a Wells Fargo research note discussing Samsung’s recent qualification of its fifth-generation 12-layer HBM3E memory by NVIDIA (NASDAQ:NVDA). The pullback comes as Micron, currently valued at $182 billion and showing a remarkable 90% gain over the past year, trades near its 52-week high of $170.45. InvestingPro data indicates the stock may be in overbought territory.

The Wells Fargo analysis cited a Korean Electronic Daily (KED) report indicating Samsung passed NVIDIA’s qualification tests for its HBM3E memory earlier today. The report stated Samsung is already shipping 12-high HBM3E to AMD (NASDAQ:AMD), while NVIDIA volumes are expected to be small as Samsung serves as NVIDIA’s third supplier. Despite competitive pressures, InvestingPro analysis shows Micron maintains a strong financial health score of 3.15 (rated as "GREAT"), with impressive revenue growth of 58% in the last twelve months.

Wells Fargo characterized the development as "an incremental negative for HBM pricing," particularly if Samsung discounts its products to regain market share. The note also highlighted potential concerns about Micron’s competitive position in the upcoming HBM4 generation, with Samsung demonstrating 11Gbps transfer speeds compared to SK Hynix’s 10Gbps, while "Micron [is] struggling to meet the requirements."

The analyst suggested that with Micron’s stock approaching $170, expectations are high ahead of the company’s upcoming earnings report next week. Wells Fargo indicated it’s "not hard to land at EPS with a $4 in the front" for Micron’s November quarter.

The research note emphasized that Micron "has to confirm that its supply is sold out for next year" to maintain positive momentum, adding that any doubt "could be troublesome" given the current stock price level. With earnings scheduled in 4 days and the stock trading at a P/E ratio of 29, investors seeking deeper insights can access comprehensive analysis and 15 additional ProTips through InvestingPro’s detailed research report.

In other recent news, Micron Technology has seen several analysts raise their price targets ahead of its upcoming earnings report. TD Cowen increased its target to $180, maintaining a Buy rating, citing positive market momentum. Similarly, Wolfe Research also lifted its target to $180, noting improved NAND sentiment and resilient DRAM pricing. Rosenblatt Securities reaffirmed a Buy rating with a $200 price target, expecting Micron to exceed its previous earnings guidance due to constrained supply and rising AI demand. Wedbush raised its price target to $200, reflecting optimism about the memory market cycle. Susquehanna also increased its target to $200, anticipating that Micron will surpass expectations and improve guidance. These developments highlight a generally optimistic outlook from analysts regarding Micron’s performance and position in the market.

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