Analyst Krish Sankar from TD Cowen maintained a Buy rating on Micron and increased the price target to $200.00 from $180.00.
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Krish Sankar has given his Buy rating due to a combination of factors that suggest a positive outlook for Micron’s stock. One significant element is the strong performance in the cloud sector, which constitutes a substantial portion of Micron’s DRAM revenues. This, along with anticipated growth in the PC and smartphone markets, sets a different scenario compared to the past cycles, particularly the one in April 2021. Sankar expresses increased confidence in Micron’s stock following the latest financial results, which exceeded expectations and were accompanied by optimistic guidance.
Another key factor supporting the Buy rating is the strategic positioning of Micron in the AI spending cycle, which heavily favors DRAM. The demand for DRAM is expected to grow significantly, driven by AI server shipments and increased DRAM content in servers. Additionally, the sustainability of DRAM pricing increases over the next quarters could lead to a reevaluation of the stock’s valuation, potentially pushing its price higher. Despite concerns about rising capital expenditures, the long-term growth prospects in the AI and cloud sectors provide a strong foundation for the Buy recommendation.
In another report released today, CLSA also reiterated a Buy rating on the stock with a $190.00 price target.
Based on the recent corporate insider activity of 76 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of MU in relation to earlier this year.