Micron Has 'Breakthrough' Potential, Worth $33/Share Says JMP's Alex Gauna

In a report published Wednesday, JMP Securities analyst Alex Gauna maintained an Outperform rating on

, with a price target of $33, following the announcement of 3D XPoint™ technology. The 3D XPoint™ technology is the "first major new memory architecture in decades and what Micron is heralding as an industry break-through," analyst Alex Gauna said. The new 3D XPoint memory has "substantially improved" speed, density and endurance, due to which it is expected to be used for Big Data, gaming, HPC, and "as yet unimagined high-performance applications," Gauna wrote, while adding that this technology was expected to "fill a niche between DRAM and NAND" that only Micron and its partner

would be able to serve. In the report JMP Securities noted, "Beyond its own significance as a new and differentiated revenue driver for Micron, 3D XPoint is likely to invigorate change toward more tiered memory and storage subsystems and, in the process, accelerate the adoption of Micron 3D NAND solutions." Gauna expects NAND SSD sales to overtake HDD industry revenues within the next couple of years. Moreover, this could generate an incremental $10 billion per year in sales by the end of the decade, which "other industry watchers are otherwise expecting to go toward HDDs." "Because Micron is first to market with 3D XPoint, should be second to market in 3D NAND, and is now ramping 16nm TLC NAND, we believe the company is in an excellent position to invest more aggressively in Cap Ex and improve its position from fourth to second in the NAND market over the next few years," the report stated. Gauna recommended investors to "aggressively" purchase Micron's shares on this opportunity as well as on "its M&A potential, prospects for improved DRAM dynamics with the ramp of Windows 10, and its strong position in the mobile market."