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On Wednesday, Mizuho (NYSE:MFG) analysts adjusted the price target for Micron Technology (NASDAQ: NASDAQ:MU) stock, increasing it to $130 from a previous target of $124. The analysts maintained their Outperform rating ahead of the company’s earnings report scheduled for June 25. According to InvestingPro data, analyst targets for Micron range from $60 to $172, with the stock currently showing strong momentum, up over 21% year-to-date.
The decision to raise the price target is based on a detailed analysis of Micron’s position in the High Bandwidth (NASDAQ:BAND) Memory (HBM) market. The analysts expect the industry’s HBM revenue to grow at a 55% compound annual growth rate (CAGR) from calendar year 2024 to 2027, driven by the adoption of HBM4 and HBM4e technologies. This aligns with Micron’s strong financial health metrics, as InvestingPro data shows revenue growth of 71% in the last twelve months and a healthy current ratio of 3.13.
Micron’s HBM revenue is anticipated to grow at a 90% CAGR over the same period, with the company expected to capture a larger market share, increasing from approximately 10% last year to 20-25% by 2025-2026. This growth is projected to contribute significantly to Micron’s DRAM revenue, enhancing both top-line performance and gross margins.
Additionally, Mizuho analysts highlighted Micron’s strong roadmap in NAND technology, noting a continued shift towards more advanced 3XXL nodes. They expressed confidence in Micron’s potential upside in HBM shipments for 2025-2026 and emphasized the role of HBM4 in driving average selling price and layer count strength.
In other recent news, Micron Technology has begun shipping samples of its LPDDR5X memory, which is notable for being the industry’s thinnest at 0.61 millimeters and offering speeds up to 10.7 Gbps. This development is expected to enhance AI performance in smartphones, with power savings of up to 20%. Additionally, JPMorgan analysts have expressed confidence in Micron’s progress, noting strong demand in the datacenter sector driven by AI and accelerated computing needs, which is bolstering demand for high-bandwidth memory and solid-state drives. In contrast, Micron’s recent decision not to update its financial guidance at a major conference has led to some investor disappointment, as expectations for a more optimistic outlook were not met.
Furthermore, TF International Securities analyst Ming-Chi Kuo suggests that Apple (NASDAQ:AAPL)’s upcoming iPhone 17 models will feature 12GB of DRAM, potentially benefiting suppliers like Micron and SK Hynix. Kuo believes this upgrade strategy is a response to increasing competition in the smartphone market. Meanwhile, Rosenblatt Securities has highlighted growth in the memory sector, with a positive outlook for Micron and Rambus Inc (NASDAQ:RMBS)., driven by factors such as AI development and increased server demand. These recent developments underscore the evolving landscape in which Micron operates, with various factors influencing its performance and market position.
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