Artificial intelligence play Micron Technology has turned a corner and put up some amazing profit growth numbers this year on renewed strong sales. The memory-chip maker reported a 122% jump in earnings in its Feb. 29-ended fiscal second quarter, and 143% growth in its fiscal Q3.
Micron stock got an upgrade Wednesday to its IBD Relative Strength (RS) Rating, from 66 to 75. The bump puts it just points below a key rating benchmark. Stocks that go on to make the biggest gains tend to have an 80 or better RS Rating as they begin their biggest climbs.
Micron Stock Has Excelled This Year
Last quarter Micron reported a reversal from a $1.43 per share loss the same quarter a year earlier to a 62-cent profit, according to MarketSurge. That was ostensibly a 143% year-over-year increase, on an 82% surge in revenue to $6.81 billion. The quarter before that its EPS rose 122% on a 58% pop in revenue.
Micron is among the top global memory-chip makers. Artificial intelligence systems run by Nvidia and AMD processors need huge amounts of memory to store the massive amounts of data they pore through to generate AI output. Analysts say Micron has a long runway ahead as AI continues to roll out globally.
On June 18 Micron hit an all-time high at 157.54, according to IBD MarketSurge research. It fell in sync with recent market rotation away from Big Tech toward other sectors, dropping to 84.91 on Aug. 5. Then it started rising again and was above 100 and on track for its fifth higher close Wednesday, up about 3.5% for the day.
Among its other key ratings Micron has an 81 Earnings Per Share Rating, placing it in the top 19% of companies for recent and long-term profit growth. It has a mild 67 Composite Rating, largely reflecting weakness last year amid a semiconductor market pullback.
Today the group Relative Strength Rating for semiconductors is a strong B+ on an A-to-E scale with A terrific and E terrible.
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More Work Needed To Reach Top Tier
Wall Street will need more than two great quarters to be convinced though. Micron has an E Accumulation/Distribution Rating, meaning mutual funds and ETFs are selling more shares than buying. However, funds are positioning for growth. The number of funds holding Micron shares rose from 2,965 in the quarter ended last September to 3,320 in March and 3,607 in June, the latest reported quarter.
Micron holds the No. 5 rank among its peers in the Computer Software-Storage industry group. Pure Storage is the No. 1-ranked stock in the group.
IBD's proprietary Relative Strength Rating identifies market leadership with a 1 (worst) to 99 (best) score. The score shows how a stock's price movement over the last 52 weeks stacks up against all the other stocks in our database.
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