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Micron Technology (MU) is a leading manufacturer of innovative memory and storage solutions, providing essential tech for industries like computing, networking, and mobile communications. With a market cap of $138.7 billion, the Boise, Idaho-based Micron is a leading manufacturer of memory chips used in various electronic devices, including smartphones, computers, data centers, and automotive systems.
Micron Technology stock has outperformed the broader market over the last year. MU has gained 93% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 27.5%. Also, in 2024, things are looking up – shares of Micron Technology rose 46.8%, surpassing SPX's 11.2% rise on a YTD basis.
Zooming in further, MU's outperformance over the past 52 weeks also looks impressive in comparison to the S&P Semiconductor SPDR's (XSD) 27.1% returns. Moreover, the stock's double-digit YTD gains outshine the exchange-traded fund's 6.2% returns over the same time frame.
MU's standout performance against broader indexes is driven by its benefit from the artificial intelligence (AI) boom and a rebound in the memory market, fueled by increased spending and demand.
Shares of Micron grew 10.6% in the first quarter, owing to rising demand for memory chips in the data center and smartphone industries. Moreover, the company is set to receive $6.1 billion in CHIPS Act grants from the Commerce Department to establish factories in New York as part of an initiative to bring semiconductor manufacturing back to the U.S. According to Senate Majority Leader Chuck Schumer (D-NY), the company intends to build numerous complex chip plants over the next 20 years.
For the current fiscal year, ending in August, analysts expect MU to report EPS growth of 104.8% year over year to $0.24. The company's earnings surprise history is robust. It beat or matched the consensus estimate in all of the last four quarters.
While the company beat the EPS estimate in the last reported quarter by nearly 164.3%, its reported sales rose 57.7% year over year, exceeding Wall Street’s estimates by 8.9%.
The consensus view on MU has been bullish overall. Among the 27 analysts covering MU stock, the consensus rating is a “Strong Buy.” That’s based on 24 “Strong Buy” ratings, two “Moderate Buys,” and one “Moderate Sell.”
This configuration is slightly more bullish than a month before, with 23 analysts suggesting a "Strong Buy."
On May 17, Mizuho analyst Vijay Rakesh boosted Micron Technology's price target by 15.4% from $130 to $150, maintaining a "Strong Buy" rating. The analyst cited rising memory prices and Micron's successful HBM3E ramp, which offers 30% less power usage and strong market share gains, sustaining momentum for HBM4.
Even though the mean price target of $132.56 indicates a premium of just 5.8% to MU’s current price levels, the Street-high price target of $225 suggests an upside potential of 79.6%.
On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
