Shares of Micron technology (NASDAQ:MU) rose 6.8% as of 1:41 PM ET on Monday.
The memory chip supplier will maintain its gains on Wednesday, becoming one of the last major companies to report before the end of the year. Ahead of Wednesday’s news, an analyst reiterated his buy rating and bullish price target.
Today, Citi Group sell-side analyst Christopher Danley issued a bullish note ahead of earnings, maintaining a buy rating and a $150 price target.
Although Micron’s shares rose sharply earlier this year, they have sold off since July amid skepticism about the non-artificial intelligence (AI) parts of the stock market. semiconductor sector. In his Monday note, Danley admitted that he expects Micron to fall below consensus for the current quarter due to weakness in the PC and smartphone markets.
However, Danley wrote: “Although there is a surplus of DRAM inventory in the PC and handset end markets (combined 50% of the [fiscal 2024] revenue), this should disappear this spring and is offset by the strength of the data center end market (35% of F24 revenue).
Micron has seen cross-currents as its high-bandwidth DRAM memory products for artificial intelligence see a surge in demand even as other end markets languish in a downturn that began as early as 2022. However, it seems that Danley thinks the good outweighs the bad consequences for the 2025 balance.
Wall Street analysts expect Micron to post revenue of $8.71 billion and adjusted earnings per share (EPS) of $1.77 on Wednesday. However, as most know, commentary and future guidance will be as or more important than the reported numbers.
While Danley thinks current quarter expectations may be slightly below revenue of $8.99 billion and earnings per share of $1.94, any potential sell-off could be an opportunity to strike. After all, demand for DRAM memory should only continue to grow in the age of AI, and Micron has been performing well lately.
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