Do not sleep on Micron Expertise this week. The semiconductor maker is slated to report fiscal second-quarter outcomes after the bell Wednesday. The report comes as sentiment round synthetic intelligence stays excessive. Nvidia shares added to their 2024 rally on Monday as the corporate kicked off its GTC Convention. Different AI performs akin to Alphabet and Tremendous Micro Laptop had been additionally increased. Analysts hope this report will function a stepping stone to stronger earnings going ahead, underpinned by elevated shipments of the corporate’s Excessive Bandwidth Reminiscence 3E reminiscence chip to Nvidia, which will probably be used along with AI expertise. Micron touts HBM3E as an integral part to maneuver the needle ahead on AI development, and to this point, analysts agree. “Micron stays our high cyclical choose within the present reminiscence cycle, which we imagine will probably be one of many greatest in historical past, in line with our Mom of All Cycles (MOAC) secular view,” Rosenblatt analyst Hans Mosesmann mentioned Monday. Mosesmann’s purchase score and $140 per share worth goal represents 50% upside from Friday’s shut. MU YTD mountain Micron Expertise inventory. “A beat and lift is broadly anticipated and HBM stays the centerpiece of consideration,” TD Cowen analyst Krish Sankar mentioned in a March 14 notice. “Our discipline work is encouraging on MU’s market share in HBM3E with estimates of 25%+ subsequent yr up from 10-15% this yr.” The analyst maintains an outperform score on Micron inventory in addition to a $120 per share worth goal, which equates to roughly 29% upside. Micron shares are up 12% this yr. Whereas that outperforms the S & P 500’s 8% acquire, it’s properly under Nvidia’s 82% surge. That efficiency hole, nonetheless, might sign a shopping for alternative into Micron’s report. “The information/commentary ought to assist with elevated confidence in EPS [earnings per share] energy of $10+, making the inventory undervalued,” mentioned Susquehanna analyst Mehdi Hosseini on Monday. The agency maintains a purchase score on Micron coupled with a $112 per share worth goal, greater than 20% above the earlier shut. Citi’s Christopher Danely is much more optimistic forward of Micron’s outcomes. The analysts raised his worth goal to $150 from $95, calling for about 61% upside shifting ahead. The brand new worth goal is “a 50% premium to Micron’s historic vary, however we imagine MU inventory ought to get a premium given rising AI publicity and different AI-exposed shares akin to AVGO and AMD have seen a 100% improve of their multiples,” he wrote Friday. “We count on the corporate to publish upside to Consensus and elevated steering for F3Q24 given sturdy DRAM [dynamic random access memory] pricing and shipments of higher-priced, higher-margin, Excessive Bandwidth Reminiscence (HBM) which is transport with Nvidia AI techniques,” Danely added.
