Analysts race to overhaul Micron stock price targets after earnings

Micron Technology shares surged in early Thursday trading, putting the stock on p.c. for its very best level in two months, after the chipmaker posted stronger-than-expected fourth quarter earnings and a strong outlook that added beef as much as the broader AI investment theme.

Micron (MU) , the primary of the major chipmakers to report quarterly earnings each and every season, might be seen as a bellwether for the semiconductor sector, on condition that its products are used in computers, smartphones and data centers around the arena.

It's also establishing a key place in the marketplace for so-in most cases in most cases is called HBM, or high bandwidth memory, chips, which beef up performance and cut back power consumption in AI systems.

Those chips, including a brand new HBM3E iteration, are in fact being built into Nvidia's (NVDA) H200 processors, as well as its newly developed Blackwell systems, have established Micron as one of only just a few global companies as a way to compete at some point of this fast-growing market.

Micron didn't disclose revenue figures for its HBM chips but reiterated that it delivered "a few hundred million dollars" of sales in its fiscal 2024, which ended Aug. 29, and expects "multiple billions of dollars of revenue of HBM in fiscal year '25."

Micron's solid HBM outlook

The group said it saw the total addressable market for HBM chips, that enables you to be also made by South Korea's SK Hynix and Samsung Electronics, rising to around $25 billion in 2025 from $four billion in 2023.

The solid HBM outlook helped offset stalled PC- and smartphone-chip sales, where prices have been hit by a broader market glut as well as a pullback in consumer-electronics spending.

Still, Micron change into ready to post a fourth-quarter final analysis of $1.18 a share, on revenue of $7.seventy five billion. The revenue line change into double the figure for the year-precedent days and just beforehand of Wall Side road forecasts.

Related: Analysts overhaul Micron stock price targets amid post-earnings slump

Taking a look into the present quarter, Micron sees revenue in the region of $eight.7 billion, with a $200 million margin of error, as well as earnings of around $1.Seventy four a share. Profit margins, Micron said, would beef up by Three percentage points to 39.5% thanks partly to a heavier mix of upper-priced HBM sales.

We are entering fiscal 2025 with the strongest competitive positioning in Micron's history," CEO Sanjay Mehrotra told analysts on a conference call late Wednesday. "As we move all through the year, we predict a broadening of demand drivers, complementing strong demand in the data center.

"We look ahead to handing over a substantial revenue record with significantly improved profitability in fiscal 2025, beginning with our guidance for record quarterly revenue in fiscal Q1," he added. "Micron is ramping production of the industry's most improved technology nodes in both DRAM and NAND."

Capital-expenditure boost at Micron

Bank of The u . s . a . analyst Vivek Arya, who boosted his Micron price target by $15 to $125 per share in a note published Thursday, change into impressed by the character of Micron's better-than-expected update.

"Despite increasing macro (softer PC, phone demand) headwinds, Micron change into ready to deliver beat/raise results on the back of solid data center demand, including continued growth in its AI-levered high-bandwidth memory (HBM) sales," he said.

"Further, management reiterated their demand a record [fiscal 2025], raised the HBM market to $25 billion+ from $20 billion with strong pricing/share visibility," he added.

TD Cowen analyst Karl Ackerman also noted the PC and smartphone softness, but added that "the expected mid-cycle in memory between now and 2025 appears to be shallower than feared, supported by continued strength from datacenter customers."

Related: Analyst updates Micron stock price target after conference

Lifting his Micron price target by $20 to $135 a share, Ackerman added that 'we see stock momentum continuing with B100 qualification, 12H HBM ramp, and improved supply chain visibility in 2025 for PC/mobile as future catalysts."

CFRA analyst Angelo Zino, who held his $100 and forty price target in place after last night's earnings report, noted the prospective upside from Micron's tie-ins with Nvidia processors equivalent to Blackwell and Rubin.

"We expect investors continue to underestimate the content growth story on the DRAM server side, with line of sight for sharply higher HBM growth as Nvidia's Blackwell offering ramps in calendar year 2025/Rubin in calendar year 2026," he said.

"To boot, we see improved PC/nondata-center demand in calendar year 2025 to have the flexibleness to appear edge applications encompass more DRAM memory."

Other moves included Morgan Stanley analyst Joseph Moore, who raised his price target on Micron to $114 a share from $100, while Goldman Sachs analyst Toshiya Hari reiterated his $A hundred forty five price target.

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Mizuho analyst Vijay Rakesh, nevertheless, lowered his target to $135 from $A hundred forty five while Susquehanna cut it to $One hundred sixty five a share from $100 seventy five.

Micron said its 2025 capital expenditures might be "meaningfully higher" than the $eight.1 billion of 2024, pegging it "around the mid-30s percentage range of revenue based on our current [capital-spending] and revenue expectations."

At current forecasts that would perchance translate to capex of $Thirteen.5 billion, a near 70% make bigger from fiscal 2024 levels.

Micron shares were last marked 17.2% higher in premarket trading to indicate an opening bell price of $112.20 each and every.

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