A Wall Street analyst’s optimistic outlook gave Micron Technology a significant boost, causing the chipmaker’s shares to rise by as much as 5% on Monday morning. Although the rally slowed down slightly by midday, the stock was still up by 1.2%.
KeyBanc analyst John Vinh reaffirmed his buy rating on Micron while raising the price target to $150 from $135. This indicates a potential upside of 21% compared to Friday’s closing price, on top of the stock’s impressive 115% gains over the past year.
After conducting a supply chain review, Vinh expressed optimism about Micron’s future prospects. Users have reported superior thermal and power performance from Micron’s HBM3E chip compared to competitors. Vinh believes this positions Micron well for significant revenue growth in the coming years.
The analyst’s confidence is supported by Micron’s partnership with Nvidia last year, where its memory chips were selected for integration into Nvidia’s GPUs for AI and high-performance computing workloads. Demand for Micron’s products is strong, with chips already sold out for 2024 and much of the 2025 supply accounted for.
The positive impact of AI is evident in Micron’s recent financial results, with a significant increase in revenue for the second fiscal quarter of 2024. The company is guiding for even more growth in the third quarter, with revenue expected to surge by 76% year over year.
Despite the recent share price increase, Micron’s valuation remains reasonable, trading at around 4 times next year’s expected sales. With robust demand for AI driving the need for memory and storage solutions, Micron is well positioned for continued growth in the future.
