Despite pessimistic forecasts and bubble concerns, the stock market keeps its momentum, driven by artificial intelligence. Micron Technology (NASDAQ: MU) stock recently received a 57% increase in its price target, highlighting its latest success.
Citibank has raised Micron’s price target to $150 from $95, indicating a potential upside of 60%. The adjustment comes ahead of Micron’s Q2 earnings report, scheduled for next Wednesday, March 20.
“We expect the company to post upside to consensus and increased guidance for F3Q24 given strong DRAM pricing and shipments of higher-priced, higher-margin, High Bandwidth Memory which is shipping with Nvidia AI systems,” stock market analyst Christopher Danely noted.
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Optimistic projections for MU stock
Expectations are high, with projections of surpassing consensus estimates and an uptick in guidance for Q3. This optimism stems from robust DRAM pricing and shipments, particularly of higher-priced, higher-margin, High Bandwidth (NASDAQ: BAND) Memory (HBM), which accompanies Nvidia (NASDAQ: NVDA) AI systems.
Citibank is adjusting its earnings-per-share (EPS) estimate for Micron from $6.38 to $6.65 for fiscal year 2025 while setting the price target based on a 15X multiple of the 2026 EPS estimate of $10.03.
Despite representing a 50% premium over Micron’s historical range, the bank believes the stock warrants such valuation, considering its growing exposure to the AI sector.
Comparisons to other AI-exposed stocks like Broadcom (NASDAQ: AVGO) and Advanced Micro Devices (NASDAQ: AMD), which have doubled their multiples, further support this view.
Micron retains its status as Citibank’s Top Pick, reflecting confidence in its prospects amidst the expanding AI landscape.
Other analysts forecast for MU stock
In addition to an optimistic projection from Citibank, On March 8, Wells Fargo’s Aaron Rakers increased their price target for Micron Technology by 31.6%, raising it from $95 to $125 while maintaining a ‘strong buy’ rating on the stock. Rakers expressed optimism about Micron’s Q2 2024 report, anticipating positive results and guidance.
Goldman Sachs expressed confidence in Micron Technology stock on March 7 by increasing its price target to $112 from the previous $103 while reiterating a ‘buy’ rating.
A robust quarter and promising future performance have led analysts to take a bullish stance on MU stock, suggesting it presents a potentially lucrative investment opportunity.
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