5 Micron Technology Analysts Raise Forecasts After Blockbuster Q2 Results

Zinger Key Points
  • While the focus is on HBM, Micron Technology’s performance in other high margin areas has also been strong, one analyst said.
  • The company expects DRAM and NAND pricing across end markets to rise through 2024 and into 2025, driven by AI, another analyst added.

Shares of Micron Technology Inc MU were climbing in early trading on Thursday, after the company reported upbeat results for its fiscal second quarter.

The results came amid an exciting earnings season. Here are some key analyst takeaways from the release.

  • Wedbush analyst Matt Bryson reiterated an Outperform rating, while raising the price target from $103 to $130.
  • JPMorgan analyst Harlan Sur maintained an Overweight rating, while lifting the price target from $105 to $130.
  • Mizuho Securities analyst Vijay Rakesh reaffirmed a Buy rating, while bumping the price target from $105 to $124.
  • Goldman Sachs analyst Toshiya Hari reiterated a Buy rating, while raising the price target from $112 to $122.
  • Stifel analyst Brian Chin maintained a Buy rating, while lifting the price target from $120 to $140.

Check out other analyst stock ratings.

Wedbush: Micron Technology’s DRAM prices rose in the high teens, while NAND prices increased more than 30% sequentially, Bryson said in a note. He added, however, that the company’s double-digit revenue growth guidance “with roughly flattish overall bits” suggests that prices “will again have to lift by double digits.”

While investors seem to be focusing on the HBM (high bandwidth memory) business, “MU is also succeeding in other high margin areas i.e., expanding its presence in data center SSDs (up triple digits Y/Y), and projecting several hundred million in revenue from its industry first monolithic die based 128 GB server DRAM,” the analyst stated.

JPMorgan: While reporting stronger-than-expected quarterly results, Micron Technology provided a higher-than-anticipated guidance for the current quarter, Sur said. He added that this reflects improved demand and pricing trends and the continued normalization of excess inventories, which has come together to drive better price hikes in DRAM and NAND across several markets.

“The team expects DRAM and NAND pricing levels across all memory and storage end markets to increase further through CY24 and into next year due to AI server demand driving growth in HBM/DDR5 and datacenter SSDs which is tightening leading-edge supply availability for DRAM and NAND,” the analyst further wrote.

Mizuho Securities: “We believe MU will continue to make significant HBM inroads as we see its C25E HBM revenues in the ~$3B range,” Rakesh said. Micron Technology could continue to generate “several hundreds of millions of dollars” in HBM revenue in fiscal 2024, he added.

“We also believe MU has already sold out the majority of its F25E HBM3E capacity,” the analyst wrote. “MU still sees HBM market share matching overall DRAM share (~25%) in C25E as its HBM3E ramp accelerates,” he further stated.

Goldman Sachs: Micron Technology reported “very strong” quarterly results, driven by higher DRAM and NAND pricing, Hari said. He added that the company guided “FY3Q non-GAAP gross margins (excl. SBC) and non-GAAP EPS (excl. SBC) well ahead of prior Street consensus.”

“We believe the stock’s YTD underperformance vis-a-vis its peers in Compute and Networking within the context of AI presents an opportunity for investors to buy/own MU ahead of a material ramp in margin-accretive HBM revenue,” the analyst further stated.

Stifel: “Revenue along with GMs (20% vrs. 13% guide) were well above ours/consensus estimates, paced by DRAM and NAND ASP growth in the upper-teens and 30%+, respectively,” Chin wrote. “The mid-point of Micron’s revenue guidance exceeded expectations and reflects +13% QQ growth, which is again largely ASP-driven,” he added.

“We expect DRAM prices to be highly sensitive to incremental demand, and we believe it is this optimism around ASP growth and improving traction/shipments in HBM that fuels management’s guidance for ’25 revenue to exceed prior highs, the analyst stated.

MU Price Action: Shares of Micron Technology had risen by 15.52% to $111.19 at the time of publication on Thursday.

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Posted In: Analyst ColorEarningsLong IdeasNewsPrice TargetReiterationTop StoriesAnalyst RatingsMoversTrading IdeasBrian ChinExpert IdeasGoldman SachsHarlan SurJPMorganMatt BrysonMizuho SecuritiessemiconductorsStifelStories That MatterToshiya HariVijay RakeshWedbush
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