Micron Stock: Even With A 150% Gain, Analysts Want More

Key Points

• Shares of Micron have been rallying for more than a year and have even more room to run. 
• Several of the heavyweight analysts are calling for further gains in the coming weeks.
• Investors should watch the share price closely to try and judge a strong entry point.

Shares of Micron Technology NASDAQ: MU have been enjoying a remarkable rally, with its stock effectively doubling over the past 12 months alone. Since the start of 2023, its shares have jumped 150%. For the most part, this eye-watering rally has been driven by the company's strategic positioning in the artificial intelligence (AI) industry, which has blossomed, if not exploded, in that timeframe. 

For those of us watching from the sidelines, you'd be forgiven for thinking you might have missed the boat. Just this morning, for example, the stock hit a fresh high, and it could soon find itself in blue-sky territory. Despite these impressive gains, however, several heavyweight analysts continue to call Micron a screaming buy, and readers should be excited.

Bullish Calls For Micron Shares

Take Morgan Stanley, for example. Earlier this week, the team upped its rating on Micron shares, citing its significant exposure to the AI memory market. The firm also raised its price target on Micron's stock, acknowledging the underestimated economic and narrative elements of AI memory.

This echoed Mizuho's move last week when they reiterated their Buy rating and gave Micron a price target of $150. Before them, Barclays and Baird were bullish on Micron's potential, with the latter adding it to its list of top semiconductor ideas. 

The Baird team highlighted the "meaningful upside opportunities" ahead, especially in light of recent pullbacks, allowing shares to take a breather. They anticipate an unprecedented outlook for the memory market over the next 12-18 months, driven by stronger-than-expected Dynamic Random-Access Memory (DRAM) pricing and the potential for high gross margins from HBM3E products.

Micron's Strong Fundamentals

This demand for high-performance memory solutions, driven by the AI revolution, has positioned Micron as a key player in the overall market, ahead of most of its peers. All the signs are there that the company intends to take full advantage of this. Recently, they announced an increase in their capital expenditure forecast for the year, from $7.5 billion to $8 billion, primarily to support their expansion in AI-related technologies.

At recent conferences, Micron executives have highlighted the company's expectations for high-bandwidth memory to become a multi-billion dollar business by 2025. It's perhaps no real surprise that Micron has a street-high price target of $150, which currently points to further upside in the region of 20%. 

Beyond the company-specific tailwinds driving the share price higher, Micron is also set to continue benefiting from strong industry tailwinds that are only getting stronger. The Citi team came out bullish on the sector as a whole, particularly Micron, earlier this month, citing an industry report showing that sales are well above seasonal sales figures.

Getting Involved In Micron Stock

According to the Semiconductor Industry Association, March sales were $50.6 billion, up more than 16% monthly and more than 15% year over year. That was above Citi's estimated $50.1 billion and the seasonal estimate for a 12% month-over-month increase and a 14% annual increase. 

All told, investors should watch Micron closely for an entry opportunity as it feels the stars are continuing to align on its growth prospects. One way to do this might be to look for the stock to close above $130, something it has yet to do, to confirm a breakout is beginning. 

Alternatively, if shares continue to pull back from their latest push for a record close, look for them to consolidate above the $115 mark, supporting the technical thesis backing up the stock.