Micron Shares Rise After Citi Upgrades Price Target
Micron Technology (NYSE: MU) saw its shares jump by 8.9% during the morning session following Citi’s decision to raise its price target from $150 to $175.
Several firms maintaining “buy” ratings are anticipating that Micron will issue guidance that significantly exceeds average market expectations. This positive outlook is buoyed by a continuous uptick in memory markets, characterized by restricted production and unexpectedly high demand, especially from data centers and the AI sector. Citi’s report underscored that memory chip shortages could persist until 2026, with demand for both DRAM and NAND memory expected to surpass supply.
Now, one might wonder if it’s the right moment to invest in Micron.
Micron’s stock has been notably volatile, with 25 instances of price fluctuations over 5% in the past year. Today’s surge indicates that the market perceives this update as significant, although it doesn’t fundamentally alter the overall view of the company’s operations.
A recent notable increase was reported when the stock rose by 4% just a day prior, spurred by news of the company reaching a new 52-week high linked to an increase in production of high bandwidth memory (HBM3E) in response to rising demand from the AI sector.
This shift in demand stems from major players in AI, like Nvidia and AMD. Consequently, Micron adjusted its fourth-quarter guidance, citing an upward trend in memory prices related to AI products. Analyst sentiment remains favorable, with Stifel noting that the market may be undervaluing the changes in Micron’s revenue from data centers, which now represents a substantial part of its income. Additionally, the company highlighted that this segment is achieving gross profits as high as 50%, a detail investors might overlook. The combination of optimistic guidance updates, robust AI demand, and positive analyst projections has bolstered investor confidence.
Since the beginning of the year, Micron’s stock has surged by 77.2%, reaching a new 52-week high of $154.74 per share. Investors who purchased $1,000 worth of Micron shares five years ago are now looking at a return of approximately $3,357.
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