Micron Stock Update
Micron Technology’s stock saw a recovery this morning after two consecutive days of decline, rising by 3.3% by 11:30 a.m. ET.
This turnaround can be attributed to Mizuho, a Japanese investment bank.
Yesterday, Mizuho increased its price target for Micron by $5, now set at $270 per share. The bank highlighted a rise in DRAM prices and growing demand for NAND high bandwidth memory (HBM), particularly in light of increasing applications in artificial intelligence. Currently, HBM represents less than 10% of Micron’s revenue, but it’s worth noting that DRAM’s gross profit margins appear to be on the upswing, and projections suggest HBM margins will see improvement by early 2026.
Mizuho also pointed out that about 60% to 65% of Micron’s DRAM supply contract prices are adjusted quarterly. This could mean that Micron might start benefiting from these price hikes in just a few months.
Looking ahead, Mizuho estimates that Micron will achieve sales of $56 billion and earnings of $17.89 per share in 2026. They anticipate growth of 18% in sales to $66.1 billion and a 21% increase in earnings to $21.69 by 2027.
At a share price of $235, Micron’s stock valuation is more than 30 times its current earnings. Expected earnings could be around 13 times next year’s earnings and under 11 times the projected 2027 earnings.
With profits expected to rise by 21%, there’s a question of whether the stock is considered reasonably priced. Mizuho seems to think so, and I find myself in agreement.
Micron could be a solid choice for growth-at-a-reasonable-price (GARP) investors.
However, before deciding to buy Micron Technology stock, there are some things to keep in mind:
According to the Motley Fool Stock Advisor, its analyst team has picked what they consider the 10 best stocks to invest in right now—unfortunately, Micron wasn’t included on that list. These 10 selections are viewed as having strong potential for significant returns over the next few years.
As a historical note, if investors had chosen Netflix back in December 2004, a $1,000 investment would be worth $556,658 today! Similarly, an investment in Nvidia from April 2005 would have grown to $1,124,157 based on past recommendations.
It’s essential to keep in mind that the stock advisor’s total average return stands at an impressive 1,001%, significantly outperforming the S&P 500’s 194%. So, it may be worth staying tuned for the latest top 10 list and considering the investing community fostered by retail investors.
