An elephant might never forget but Micron Technology (MU) has more storage space.
The Boise, Idaho, company makes memory and storage chips for data centers, computers and smartphones, and its client list includes such tech-sector superstars as AI-chip chieftain Nvidia (NVDA) , Mac and iPhone maker Apple (AAPL) , Facebook parent Meta Platforms (META) and software kingpin Microsoft (MSFT) .
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Make no mistake, there’s money in memories, and we’re not just talking about those singing cats on Broadway.
“After the historic downturn of 2022–2023, the memory industry has entered a phase of strong recovery. In 2024, memory revenue reached a record $170 billion,” according to market researcher Yole Group.
“This rebound was fueled by AI-training requirements in data centers, with [high-bandwidth memory) playing a pivotal role due to its premium pricing and performance advantages,” the firm added.
HBM continues to outperform the broader DRAM chip segment, Yole Group said. This year HBM revenue is set to nearly double to around $34 billion.
Micron is a key player in the HBM market, offering solutions like HBM3E and HBM4 designed for high-performance computing and AI applications.
Micron Technology CEO Sanjay Mehrotra recently touted a plan to expand the company’s U.S. investment. (Photo by Mandel Ngan/AFP via Getty Images)
CEO: Micron committed to domestic chip industry
The company recently joined the Trump administration to unveil plans to expand its U.S. investments to about $150 billion in domestic memory manufacturing and $50 billion in research and development, creating an estimated 90,000 direct and indirect jobs.
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“Micron’s U.S. memory manufacturing and R&D plans underscore our commitment to driving innovation and strengthening the domestic semiconductor industry,” Chairman, President and CEO Sanjay Mehrotra said in a statement.
The company’s shares are up nearly up nearly 45% this year and off 16% from this time in 2024.
Investment firms have been issuing research reports for Micron Technology ahead of its fiscal-third-quarter earnings report, scheduled for June 25.
Wedbush boosted its price target on Micron to $150 from $130 while maintaining an outperform rating.
The firm said memory-pricing trends turned more positive in the second quarter.
And while Wedbush said it doesn’t see as significant an inflection in Q3 as it had been expecting back in March, the firm said pricing for both DRAM and NAND, which are two types of semiconductor memory, “still will lift over the next couple of quarters.”
Morgan Stanley ‘tactically bullish’ on Micron
Better fundamentals are driven by stronger enterprise/server demand, which started around April and looks to hold through the rest of the year, Wedbush said. Demand for both AI and standard workloads appears better than might have been initially anticipated, it said.
“Moreover, we view growing [high-bandwidth memory] requirements as not just positive for MU’s numbers but also ultimately positive for industry dynamics as [capital spending] and clean-room space are reallocated to support HBM growth,” Wedbush said.
Related: Analysts rework Micron stock price targets after earnings
This will limit the likelihood of too much supply of NAND/DRAM, and it increases the probability that production of more standard parts will trail demand. That, the firm said, would create a more positive pricing/margin cycle vs. what is embedded in its expectations, the firm said.
Morgan Stanley maintained an equal-weight rating and $98 price target on Micron, given how much the stock has rallied already, according to The Fly. But the investment firm is “tactically bullish,” given that AI spending is materially accelerating as Micron grows its participation.
The investment firm, which notes that its estimates remain 20% above consensus for August-quarter earnings, also highlights Sandisk, which it likes better long term and on which it has an overweight rating.
Based in Milpitas, Calif., Sandisk designs and produces flash-memory products, including memory cards, USB flash drives and solid-state drives.
Consensus numbers have started to come up for Micron over the past few weeks, but in addition to Morgan Stanley being about 20% above consensus for August earnings per share, the firm is also 14% above for November after it raised estimates six weeks ago.
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