Stock of Micron Heads for Best Month in 13 Years as Bulls See More Gains in Ai

Micron Technology Inc.'s stock appears to be on an unstoppable trajectory as of late.

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In premarket trading on Tuesday, the stock is up by 2%, setting the stage for its eighth consecutive session of gains if it maintains its positive momentum through the regular trading session. Should this winning streak persist, it would mark Micron's longest streak since its 11-session advance that concluded on December 24, 2019, as reported by Dow Jones Market Data.

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Even prior to factoring in Tuesday's premarket gains, Micron's stock had already surged by 29.3% for the month of March up to Monday's closing bell. This surge positions the stock for its most substantial monthly gain since its impressive 31.4% surge in January 2011.

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The driving force behind this rally? It comes as no surprise. Micron has firmly established itself as a financial beneficiary of artificial intelligence in the eyes of Wall Street, stoking investor enthusiasm for its future prospects.

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In particular, Micron's high-bandwidth memory (HBM) product is deemed critical for the AI revolution. According to Mizuho analyst Vijay Rakesh's analysis released late Monday, Micron's HBM prices appear stable for much of this fiscal year, but there is potential for upside toward the latter part of this year and into the following year due to supply constraints.

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Rakesh highlights Micron's HBM3E offering as particularly competitive, boasting approximately 30% lower power consumption compared to alternatives. Overall, he forecasts HBM to experience significant year-over-year growth ranging from 100% to 200%, with Micron well-positioned to capture market share.

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Rakesh suggests that Micron's shares could undergo a "re-rating" typically reserved for companies facilitating AI growth, potentially commanding a higher valuation. Additionally, he notes the likelihood of Micron negotiating Chips Act funding from the U.S. government. Consequently, he raises his price target on Micron shares from $124 to $130 in his latest report while maintaining a buy rating.

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Hans Mosesmann, an analyst at Rosenblatt Securities, also chimed in on Micron in a report issued on Monday. Mosesmann emphasizes that HBM is poised to not only emerge as a top memory category but also potentially the most price-inelastic.

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He dismisses the relevance of historical DRAM channel checks or past semiconductor cycles, asserting that the current landscape signifies the onset of what he dubs the "mother of all" memory cycles.

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Mosesmann maintains a buy rating on Micron's stock and sets a target price of $225.

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