Micron is expected to grow by another 120%. What will boost the company's stock?

Several banks have raised their targets on shares of memory chip manufacturer Micron. Some of them see in the company's securities the potential for growth up to 121%, despite the fact that since the beginning of the year they have already added more than 210%. Analysts updated their targets after the company reported financial results for the first quarter of the fiscal year, which significantly exceeded market expectations, writes CNBC. In addition, the company provided a profit and margin outlook that was noticeably more optimistic than analysts had anticipated.

Micron shares jumped 16% in trading on Dec. 18.

- Rosenblatt Securities raised its target price on Micron shares from $300 to $500, maintaining a "buy" recommendation. His estimate is the highest among analysts and implies a 121% increase in the stock relative to the closing price on December 17.

- Analysts of JPMorgan have similar expectations: they raised the target price of Micron shares from $220 to $350, pointing to the favorable price environment. JPMorgan's target suggests growth of quotations by 55%.

- Morgan Stanley called Micron's results the strongest upside in revenue and net income in the history of the U.S. semiconductor industry, excluding Nvidia. "If the AI market continues to grow as we expect, the benefits of the AI trend will extend much wider than just to processor makers over the next 12 months, with the memory segment being the biggest beneficiary," the analysts wrote.

Morgan Stanley raised its target price on shares of Micron Technology from $338 to $350, maintaining a buy recommendation (Overweight rating). Its estimate is also 55% higher than the current quotations.

- Analysts of Bank of America also joined the forecasts. They raised their recommendation on Micron securities from "neutral" to "buy", considering that the company demonstrates high growth potential on the threshold of the new year, CNBC points out. BofA analyst Vivek Arya raised the target price of Micron shares from $250 to $300, which implies their growth by 33% from the closing level of trading on December 17.

"We are revising our view on two key points: first, on the sustainability of the memory market cycle - which we estimate will continue through calendar year 2026 due to a modest ramp-up in supply and demand from AI. At the same time, the high-bandwidth memory (HBM) segment could triple in size by 2028," Arya pointed out, noting that BofA also revised its estimates regarding "the quality of Micron's balance sheet." "The company exhibits a free cash flow margin of 30%, is cash flow positive, and will be able to significantly ramp up share repurchases in about a year, once Chips Act requirements are finalized," Arya wrote. The Chips Act is a U.S. government support program for the semiconductor industry that imposes capital restrictions in exchange for subsidies.

However, risks remain for Micron going forward, Arya noted. "While management expects generally favorable pricing conditions in both the DRAM (RAM) and NAND (flash memory) markets throughout 2026 and early 2027, current abnormally high spot prices for DDR4 and DDR5 chips in the $25-50 range are likely to approach contract prices (long-term customer agreements) below $10 over time. This could lead to increased volatility in stocks from the memory sector," the analyst explained.

Of the 40 analysts covering the company's stock, 33 advise buying it, six are neutral, and one advises selling.

This article was AI-translated and verified by a human editor