Micron Technology (NASDAQ:MU) isn’t one of the first chip companies most investors think of, but this lesser-known juggernaut is still rolling along. In fact, UBS recently released a note that maintains a Buy rating on the stock, and shares were up nearly 3% in Monday afternoon’s trading as a result.
Not only did UBS keep its Buy rating in place, but it also hiked its price target from $125 to $155 along with its next quarter’s estimates. The biggest reason? Memory industry pricing for both Dynamic Random Access Memory (DRAM) and NOT AND (NAND) flash memory is expected to continue to be high for the foreseeable future.
More producers are starting to look to high-bandwidth memory to power various applications, and capital expenditure (CAPEX) rates are starting to increase. That, in turn, makes DRAM and NAND memory more attractive propositions and, ultimately, makes Micron more attractive.
Make Memory Sexy Again
While at the Computex show just days ago, Micron made a bold claim: it’s going to “make memory sexy again.” It’s noted that the rise of artificial intelligence (AI) applications is driving a lot of investment, and that means that memory will be a vital part of the process going forward.
That, in turn, as Micron’s vice president and general manager of the Consumer & Components Group, Dinesh Bahal, put it, will “really impact the supply-demand balance.” In fact, you can already see some of this happening, Bahal notes, as the price of a terabyte of NAND has started to turn around, going from what used to be $50 to around $80 now.
Is Micron Stock a Buy or Sell?
Turning to Wall Street, analysts have a Strong Buy consensus rating on MU stock based on 23 Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 101.33% rally in its share price over the past year, the average MU price target of $139.50 per share implies 3.1% upside potential.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
