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Investing.com - Piper Sandler raised its price target on Micron Technology (NASDAQ:MU) to $165 from $120 on Thursday, while maintaining an Overweight rating on the memory chipmaker’s stock. Currently trading at $127.25, Micron has shown remarkable momentum with a 42% gain over the past six months. According to InvestingPro data, the stock’s RSI indicates overbought territory, suggesting investors should monitor entry points carefully.
The research firm cited Micron’s "impressive quarter" and guidance for the August quarter that exceeded market expectations. The strong performance was attributed to improved market conditions and a favorable product mix shift in the company’s portfolio. With revenue growth of 71% in the last twelve months and analysts forecasting continued sales growth, InvestingPro analysis reveals 12 additional key insights about Micron’s growth trajectory.
Piper Sandler noted that DRAM growth now exceeds NAND growth, leading to both revenue acceleration and improved profitability for Micron. This shift has helped the company forecast gross margin of 42% for the August quarter, representing a 3% increase from the May quarter.
The firm highlighted that while Micron faces startup costs associated with new fabrication facilities, these expenses are being offset by the favorable product mix and improved market conditions. High Bandwidth (NASDAQ:BAND) Memory (HBM) products continue to show rapid growth and remain on track to reach approximately 23% market share during the second half of the calendar year.
Piper Sandler views Micron as "an outsized beneficiary from current market trends" in both data center and artificial intelligence sectors due to the company’s HBM products and overall market positioning.
In other recent news, Micron Technology reported impressive fiscal third-quarter results, surpassing analysts’ expectations with an earnings per share (EPS) of $1.91 against a forecast of $1.59. The company’s revenue reached $9.3 billion, exceeding the anticipated $8.84 billion. KeyBanc responded to these strong results by raising its price target for Micron from $135 to $160, maintaining an Overweight rating. Micron’s robust performance was driven by strong demand in the DRAM and NAND segments, with DRAM revenue alone reaching $7.1 billion, a 51% year-over-year increase. The company also provided optimistic guidance for the fourth quarter, anticipating revenue of $10.7 billion, supported by continued demand in AI-driven markets.
Micron’s strategic investments in U.S. manufacturing and R&D were also highlighted, with plans to invest approximately $200 billion over the next two decades. This includes expanding its facilities in Boise, Idaho, and Manassas, Virginia, to support automotive, aerospace, and defense markets. Despite the positive financial performance, Micron’s stock experienced a slight decline in both regular and aftermarket trading. Looking forward, Micron expects to achieve its target DRAM market share in the low 20% range earlier than anticipated, driven by a nearly 50% sequential growth in High Bandwidth Memory (HBM) revenue. The company remains focused on leveraging its leadership in AI-driven memory markets and maintaining its competitive edge through technological advancements and strategic investments.
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