Micron's Stock is Cruising Toward Its Best Day in 12 Years

The cyclical nature of the memory-chip market is well-known, but there's particular enthusiasm on Wall Street for Micron Technology Inc.'s capacity to capitalize on the current upswing.

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In Thursday's morning trading session, Micron's shares (MU, 16.33%) surged by 14.6%, following the company's earnings report that surpassed consensus expectations. Micron attributed its success to improved pricing and supply/demand dynamics, partly fueled by the momentum in artificial-intelligence servers.

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Micron's stock is set to achieve its most significant percentage gain since December 22, 2011, when it soared by 15.7%, if current prices persist until the market close.

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The company specializes in high-bandwidth-memory (HBM) products, which have become indispensable in the era of AI computing. Raymond James analyst Srini Pajjuri described HBM as potentially the most powerful secular driver the industry has ever witnessed.

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Maintaining an outperform rating on Micron shares, Pajjuri raised his price target from $100 to $130 in his latest analysis.

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Cantor Fitzgerald's C.J. Muse echoed this optimism, stating, "Expectations were high, but Micron certainly delivered the goods." Muse emphasized that Micron's outlook for the May quarter surpassed expectations, especially given the potential for an annualized earnings run-rate exceeding $2.00, early in the cycle.

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Additionally, Micron anticipates tight supply conditions for both DRAM and NAND throughout the calendar year, potentially resulting in an annualized earnings per share range of $7 to $8 by the end of 2024.

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Muse reiterated an overweight rating on the stock and increased his price target to $135, surpassing the recently revised level of $120.

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Piper Sandler's Harsh Kumar hailed Micron's latest results and outlook as "stellar," foreseeing favorable trends persisting into 2025. Kumar highlighted the combination of tight supply, rising demand, inventory normalization, and increased HBM die size as driving significant improvements in pricing.

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He raised his price target to $130 from $95, maintaining an overweight rating.

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JPMorgan's Harlan Sur suggested that Micron shares still have room to grow, projecting continued outperformance through 2024. Sur noted that Micron's HBM3e product is already sold out for the current year, with much of the 2025 supply also allocated.

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Maintaining an overweight rating, Sur raised the price target to $130 from $105.

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Shares of fellow memory player Western Digital Corp. (WDC, 7.36%) also saw gains of about 6%.

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