To the close of session on Tuesday, Micron Technolog will present his fiscal 3rd quarter results 2024. About it, the Wall Street analysts have been optimistic waiting for a bottom line of $0.51 per share on revenue of around $6.66 billion according to Martin Baccardax at The Street.
Micron Technology Stock rose in early trading on Monday, extending extraordinary gains of the memory chip maker so far this year, after a Key price target upgrade from top Wall Street analyst.
Micron added around $60 billion in market value this yearsince investors see that the Group’s high-bandwidth memory (HBM) chips play key role in increasing AI investment.
HBM chips are designed to integrate into larger AI semiconductors, including those made by NVIDIA, to help improve system performance and reduce power consumption.
Micron has also said that the Rising demand for its legacy DRAM memory products continues over the next two years.
He Citigroup analyst Christopher Danelywho raised its price target for Micron by $25 to $175 per share In a note published on Monday, he considers that the Strong sales and improving profit margins will drive better-than-expected earnings.
Demand for high-bandwidth memory increases
That opinion echoes the comments from CEO Sanjay Mehrotrawho told investors in late March that Micron is “on track to generate several hundred million dollars of HBM revenue in fiscal 2024.”
Mehrotra added that HBM’s revenue “would increase our DRAM and overall gross margins beginning in the fiscal third quarter.”
South Korea-based SK Hynix, a key Micron competitor, predicted a HBM annual demand growth of around 60% in the medium and long term and said that its chips were sold out for all of this year and most of 2025.
Micron, which presented new 12-layer HBM3E chips earlier this year, too allocated the majority of its legacy HBM semis for the next financial year.
Danely, who has a purchase rating for Micron stock, he also maintains that “should continue to trade at a premium to its historical range given the exposure to AI.”
He Baird analyst Tristan Gerrais also bullish on Micron heading into Wednesday’s earnings. He raised his price target from $22 to $172. in a note published on Monday.
“We continue to see significant growth opportunities for Micron since the DRAM prices remain strong“Gerra and his team wrote.
Gerra foresees that the part of HBM of Micron operations will generate $3 per share in earnings next year, with $9 coming from the rest of the technology group’s business.
“It justifies a 30x price-earnings multiple on Micron’s projected exposure to HBM starting next year…assuming that the HBM revenues are 20% of total DRAM at the end of calendar 2025for a potential of $3 in earnings per share in fiscal year 2026,” Gerra said.
A risk for Micron: China’s export restrictions
A factor that will also be key to Micron’s profits in the coming months will be If and how the Biden administration advances export restrictions on key AI technologies to China.
Bloomberg reported earlier this month that officials were looking tighten rules on selling full-gate architecture, or GAA, to China-based clients, with talks in the early stages to limit HBM sales.
GAA is similar to HBM in which it is designed to reduce energy and improve performancebut it is a Transistor design technology and not a memory technology.
At Micron Technolog the 70 and 200 period moving averages remain below the price, RSI rises at 57 points and the MACD lines above the zero level.
Medium and long-term resistance is at $157.52. Meanwhile, Ei indicators are mixed.
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