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Wednesday, Micron Technology (NASDAQ:MU) stock received a continued Overweight rating and a $130.00 price target from Wells Fargo (NYSE:WFC) analysts. Following a TrendForce report indicating Micron is raising prices due to unexpected demand and tighter market conditions, the company’s shares are trading higher. This price increase is in line with earlier reports this month forecasting an approximate 11% price hike by Micron. According to InvestingPro data, Micron’s stock is currently trading below its Fair Value, with analysts setting price targets ranging from $75 to $200, suggesting significant potential upside.
The TrendForce report suggests that the demand surge spans various business segments, prompting Micron to adjust prices accordingly. This development mirrors actions by other industry players, with SanDisk reportedly planning to implement a more than 10% price increase for its NAND products starting April 1. Additionally, reports indicate that China’s Yangtze Memory Technologies Co. (YMTC) is preparing to raise prices next month, potentially exceeding 10%. InvestingPro data shows Micron’s strong financial position, with a revenue growth of 71% in the last twelve months and a healthy current ratio of 3.13, indicating robust liquidity.
The industry trend is not limited to these companies. According to the analyst, there are expectations that other major players in the memory and storage market, like Samsung (KS:005930) and SK Hynix, may also increase their prices in the near future. These anticipated moves come as the sector experiences a tightening in memory and storage market conditions.
Micron Technology’s stock movement today reflects the market’s response to the TrendForce report and the broader industry pricing dynamics. The company’s strategic pricing adjustments amid evolving market demand and supply conditions are a key factor in maintaining its Overweight rating and price target at Wells Fargo.
In other recent news, Micron Technology has reported earnings that exceeded expectations, with a notable revenue increase of over 50% in the February quarter. This growth was primarily driven by the ramp-up of its High Bandwidth (NASDAQ:BAND) Memory (HBM) products, which have also led to an updated revenue forecast of $8.80 billion for the May quarter, surpassing previous estimates. Analysts from Piper Sandler, Baird, Stifel, Rosenblatt Securities, and Cantor Fitzgerald have all weighed in on Micron’s performance, offering a range of price targets from $120 to $200, with varying degrees of optimism about the company’s future prospects.
Baird analysts increased their price target to $163, citing the significant growth potential of HBM and LPDDR memory lines, expected to drive future margin expansion. Meanwhile, Rosenblatt Securities adjusted their target to $200, pointing to increased DRAM demand as a key growth driver, although they noted ongoing pressure on NAND margins. Stifel and Cantor Fitzgerald maintained their respective $130 targets, with both firms highlighting Micron’s strategic positioning in the HBM market and its potential for growth despite temporary margin pressures.
Micron’s guidance for the upcoming quarter also includes a gross margin of 36.5%, which, while lower than the previous quarter, is better than initially feared. This performance is attributed to strong demand in the Data Center sector and the company’s success in securing major clients for its HBM3E product. Despite some concerns over NAND supply adjustments, analysts remain confident in Micron’s ability to capitalize on the growing AI market and data center expansion, with expectations of improved DRAM demand and market share gains in high-value sectors.
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