Micron Technology Stock: A Potential Buy Amid AI Boom and Market Recovery

Is Micron Technology Stock a Buy Now?

Shares of Micron Technology (NASDAQ: MU) have clocked impressive gains of 58% so far this year, but the past few weeks it's fallen, even though the company reported a solid set of fiscal 2024 third-quarter results (for the three months ended May 30) in late June. More specifically, Micron stock has fallen about 14% from the 52-week highs it hit on June 18. Let's see why that has been the case and whether investors should use the dip to buy more shares. Lofty Wall Street expectations are weighing on Micron Technology Micron's recent quarterly results were stellar. The company reported a stunning 81% year-over-year increase in revenue to $6.8 billion. It also reported a non-GAAP (generally accepted accounting principles) profit of $0.62 per share as compared to a loss of $1.43 per share in the same quarter last year. The numbers exceeded Wall Street's expectations of $0.50 per share in earnings on revenue of $6.67 billion. The company's outlook also slightly exceeded analyst estimates. Micron is expecting $7.6 billion in revenue in the current quarter and adjusted earnings per share (EPS) of $1.08. However, the forecast is barely above Wall Street's expectation of $7.58 billion in revenue and EPS of $1.02. According to some estimates, the memory specialist was even expected to deliver more than $8 billion in revenue. Micron's lofty expectations can be attributed to the huge demand for its memory chips that power artificial intelligence (AI) graphics processing units (GPUs). The chipmaker's AI-specific, high-bandwidth memory (HBM) is being used by the likes of Nvidia, and the demand for this type of memory is so strong that Micron has sold out its entire capacity for 2024 and 2025. The good part is that the robust demand for HBM will contribute strongly to Micron's revenue, increasing from "several hundred million dollars" in the current fiscal year to "multiple billions of dollars" next year, the company says. It is worth noting that HBM will present a solid long-term growth opportunity for Micron as the market for these chips is expected to grow at a scorching annual rate of 68% through 2030, generating annual revenue of almost $86 billion at the end of the forecast period. More importantly, Micron's projected year-over-year growth for the current quarter indicates it is indeed benefiting handsomely from this opportunity. The company's top line is on track to jump 90% year over year in the fourth quarter of fiscal 2024. Its bottom line will also improve significantly compared to an EPS loss of $1.07 in the same period last year. So, investors seem to be overreacting to Micron's latest results, especially considering the company has multiple AI-related catalysts beyond HBM that will help it post stronger growth in the current quarter. For instance, AI-enabled smartphones and personal computers (PCs) are likely to drive an increase in memory sales for Micron because each AI-enabled smartphone and PC carries higher memory content. For example, Micron points out that the arrival of AI PCs will trigger an upgrade cycle. The good part is that each AI-enabled PC is expected to have 40% to 80% more dynamic random access memory (DRAM) than a traditional PC. At the same time, AI PC shipments are forecast to increase at an annual rate of 44% through 2028, opening a healthy long-term growth opportunity for Micron. AI smartphones are also set to drive stronger memory demand. Micron says that AI-enabled flagship smartphones require a 50% to 100% increase in memory content compared to non-AI flagship smartphones released last year. Again, this is a solid growth opportunity for Micron as sales of AI smartphones could increase fourfold by 2027, according to Counterpoint Research. These lucrative growth drivers indicate why a big surge is expected in Micron's earnings going forward. MU EPS Estimates for Current Fiscal Year data by YCharts. EPS = earnings per share. Buying the stock looks like a no-brainer after its pullback The outstanding earnings growth that Micron is forecast to deliver means investors are getting a good deal on the stock right now. It is trading at just 15 times forward earnings, significantly lower than the Nasdaq-100's forward earnings multiple of 29 (using the index as a proxy for tech stocks). The sales multiple of about 6.8 also presents a nice discount to the U.S. tech sector's average of 8.3. Savvy investors, therefore, should consider using this tech stock's recent drop as a buying opportunity. Catalysts such as AI are likely to help it deliver impressive long-term growth, which could result in more stock market upside. Should you invest $1,000 in Micron Technology right now? Before you buy stock in Micron Technology, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Micron Technology wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $780,654!* Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy. 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Is Micron Technology Stock a Buy Now? | The Motley Fool

The memory specialist's stock price has been heading south of late. Shares of Micron Technology (MU 2.55%) have clocked impressive gains of 58% so far this year, but the past few weeks it's fallen, even though the company reported a solid set of fiscal 2024 third-quarter results (for the three months ended May 30) in late June. More specifically, Micron stock has fallen about 14% from the 52-week highs it hit on June 18. Let's see why that has been the case and whether investors should use the dip to buy more shares. Micron's recent quarterly results were stellar. The company reported a stunning 81% year-over-year increase in revenue to $6.8 billion. It also reported a non-GAAP (generally accepted accounting principles) profit of $0.62 per share as compared to a loss of $1.43 per share in the same quarter last year. The numbers exceeded Wall Street's expectations of $0.50 per share in earnings on revenue of $6.67 billion. The company's outlook also slightly exceeded analyst estimates. Micron is expecting $7.6 billion in revenue in the current quarter and adjusted earnings per share (EPS) of $1.08. However, the forecast is barely above Wall Street's expectation of $7.58 billion in revenue and EPS of $1.02. According to some estimates, the memory specialist was even expected to deliver more than $8 billion in revenue. Micron's lofty expectations can be attributed to the huge demand for its memory chips that power artificial intelligence (AI) graphics processing units (GPUs). The chipmaker's AI-specific, high-bandwidth memory (HBM) is being used by the likes of Nvidia, and the demand for this type of memory is so strong that Micron has sold out its entire capacity for 2024 and 2025. The good part is that the robust demand for HBM will contribute strongly to Micron's revenue, increasing from "several hundred million dollars" in the current fiscal year to "multiple billions of dollars" next year, the company says. It is worth noting that HBM will present a solid long-term growth opportunity for Micron as the market for these chips is expected to grow at a scorching annual rate of 68% through 2030, generating annual revenue of almost $86 billion at the end of the forecast period. More importantly, Micron's projected year-over-year growth for the current quarter indicates it is indeed benefiting handsomely from this opportunity. The company's top line is on track to jump 90% year over year in the fourth quarter of fiscal 2024. Its bottom line will also improve significantly compared to an EPS loss of $1.07 in the same period last year. So, investors seem to be overreacting to Micron's latest results, especially considering the company has multiple AI-related catalysts beyond HBM that will help it post stronger growth in the current quarter. For instance, AI-enabled smartphones and personal computers (PCs) are likely to drive an increase in memory sales for Micron because each AI-enabled smartphone and PC carries higher memory content. For example, Micron points out that the arrival of AI PCs will trigger an upgrade cycle. The good part is that each AI-enabled PC is expected to have 40% to 80% more dynamic random access memory (DRAM) than a traditional PC. At the same time, AI PC shipments are forecast to increase at an annual rate of 44% through 2028, opening a healthy long-term growth opportunity for Micron. AI smartphones are also set to drive stronger memory demand. Micron says that AI-enabled flagship smartphones require a 50% to 100% increase in memory content compared to non-AI flagship smartphones released last year. Again, this is a solid growth opportunity for Micron as sales of AI smartphones could increase fourfold by 2027, according to Counterpoint Research. These lucrative growth drivers indicate why a big surge is expected in Micron's earnings going forward. The outstanding earnings growth that Micron is forecast to deliver means investors are getting a good deal on the stock right now. It is trading at just 15 times forward earnings, significantly lower than the Nasdaq-100's forward earnings multiple of 29 (using the index as a proxy for tech stocks). The sales multiple of about 6.8 also presents a nice discount to the U.S. tech sector's average of 8.3. Savvy investors, therefore, should consider using this tech stock's recent drop as a buying opportunity. Catalysts such as AI are likely to help it deliver impressive long-term growth, which could result in more stock market upside.

Micron Technology Analysts Remain Bullish After Management Meetings, 'AI ... Could Become An Incremental Driver' - Micron Technology (NASDAQ:MU)

The company's competitive position could improve in HBM, with the TAM expected to exceed $20B in 2025. Micron Technology Inc MU shares were climbing in early trading on Friday and are up more than 60% year to date on an AI rally. Management meetings with analysts were held in Boston and New York. Here are some takeaways. BofA Securities On Micron Technology Analyst Vivek Arya maintained a Buy rating and price target of $170. Micron Technology's key message was "very bullish" regarding pricing and mix shift towards "differentiated AI computing and enterprise storage products," Arya said in a note. Management reiterated their goal of expanding their share of high bandwidth memory (HBM) towards 20%-25% in 2025, in a target addressable market (TAM) that could exceed $20 billion, he added. "Meanwhile edge AI -- phones and PCs -- is just getting started and could become an incremental growth driver over the next few years," the analyst wrote. Check out other analyst stock ratings. Goldman Sachs On Micron Technology Analyst Toshiya Hari reiterated a Buy rating and price target of $158. Micron Technology is set to improve its competitive position in HBM as well as in the "overall DRAM and NAND industry supply/demand dynamics," Hari said. "The company continues to expect several hundred million dollars of HBM revenue in FY2024 which steps up materially to multiple billion dollars in FY2025," he added. Micron Technology, which is qualified at Nvidia Corp NVDA is currently shipping for H200, the analyst stated. "In fact, per management, the company is sold out (i.e. HBM bits have been allocated) for both CY2024 and CY2025, while pricing negotiations are also nearly complete through CY2025," he further wrote. MU Price Action: Shares of Micron Technology had risen by 1.68% to $132.42 at the time of publication on Friday. Read Next: * JPMorgan, Citigroup, Wells Fargo Report Better-Than-Expected Q2 Earnings: Dimon Says Inflation, Interest Rates 'May Stay Higher Than The Market Expects' Photo: Photo by NPS_87 on Shutterstock Market News and Data brought to you by Benzinga APIs

Here's why BofA is bullish on Micron stock By Investing.com

Bank of America analysts maintain a bullish outlook on Micron Technology (NASDAQ:MU), citing significant opportunities in AI and a structurally improved industry landscape. Following investor meetings in Boston and New York with Micron CFO Mark Murphy, CVP Satya Kumar, and IR Samir Patodia, Bank of America reiterates its Buy rating and a price target of $170 for Micron. According to the bank, key takeaways from the meetings emphasize strong pricing, supply discipline, and mix improvement towards AI computing and enterprise storage products. Analysts explain that Micron aims to expand its high bandwidth memory (HBM) market share to 20-25% in a calendar year 2025 TAM that could exceed $20 billion. This marks a substantial increase from less than 10% of a $14 billion TAM in 2024. In addition, Bank of America says the company is sold out at determined pricing through the end of next year, indicating robust demand and clear visibility. "Edge AI - phones and PCs - just getting started and could become an incremental growth driver over the next few years," according to Bank of America analysts. They highlight Micron's industry-leading technology, boasting a 30% performance advantage over peers in HBM, and a strong balance sheet as key differentiators. The bank says the complexity of AI memory, requiring three times the number of wafers for the same bit output as traditional DRAM, further solidifies Micron's market position. Micron's focus on HBM is also expected to tighten traditional capacity, leading to better pricing across DRAM. Bank of America highlights that the company also anticipates gross margins to improve consistently, driven by a mix shift to higher-margin products such as HBM, high-capacity DIMM, LPDDR, and enterprise SSDs. Bank of America notes Micron is preparing for conservative scenarios, assuming competitors like Samsung may improve their HBM yield. However, any delays in competitors' qualifications could provide upside for Micron. In conclusion, Bank of America remains positive on Micron, highlighting its broad exposure to AI and disciplined supply management as factors that could drive substantial growth and improved financial performance.