Stifel reiterates buy rating on Micron stock ahead of earnings report

Investing.com - Stifel maintained its Buy rating and $130.00 price target on Micron Technology (NASDAQ:MU) stock Friday ahead of the company’s upcoming earnings announcement. With a current market capitalization of $136 billion and trading at $121.82, InvestingPro data shows the stock is currently fairly valued, though technical indicators suggest it may be in overbought territory.

Micron is scheduled to report its fiscal third-quarter earnings on June 25 after market close, with Stifel expecting results to exceed both its own and consensus estimates for the May-ending quarter. The company has demonstrated strong momentum, with revenue reaching $31.32 billion in the last twelve months. InvestingPro analysis reveals 13 additional key insights about Micron’s performance and outlook.

The firm believes Micron’s bit shipments likely benefited from pull-forward of PC and phone production as manufacturers sought to take advantage of exemptions from higher reciprocal tariffs, though recent checks indicate OEM inventory remains at reasonable levels.

Stifel notes that broader DRAM demand remains strong, particularly for high-capacity DRAM and LPDDR5X, with pricing expected to increase into September, potentially supporting Micron’s fiscal fourth-quarter guidance above current estimates.

The research firm anticipates Micron will guide fiscal fourth-quarter gross margins higher by 200-300 basis points into the upper-30% range, with potential to exceed 40% by fiscal first quarter due to higher mix of 12-Hi HBM3E memory products.

In other recent news, Micron Technology has announced significant developments that are capturing investor attention. The company plans to invest approximately $200 billion in U.S. semiconductor manufacturing, including $150 billion for domestic memory production and $50 billion for research and development. This investment is expected to create 90,000 direct and indirect jobs and is supported by a $275 million CHIPS Act direct funding award for its Virginia facility expansion. Additionally, Micron’s HBM3E memory solution will be integrated into AMD (NASDAQ:AMD)’s upcoming Instinct MI350 Series GPU platforms, enhancing AI model capabilities.

Micron has also reportedly secured a supply deal with Nvidia (NASDAQ:NVDA) for a new memory solution called SOCAMM, marking an advantage in the competitive AI acceleration market. Analyst firms have shown optimism, with Citi raising Micron’s price target to $130 due to stronger-than-expected DRAM pricing and UBS increasing its target to $120, citing stable demand for DDR (NYSE:SITC) across various markets. These developments suggest a positive outlook for Micron’s future performance, as noted by the analysts.

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