Micron quadruples year-to-date. Wall Street mostly thinks Wednesday’s earnings will live up to the hype
Shares of chipmaker Micron hit a new all-time high on Monday, and are up more than 300% since the beginning of the year due to a global supply shortage of memory chips. Despite concerns that chip stocks could be topping out as the industry hustles to boost supply, Wall Street thinks Micron still has plenty of room to run. Wednesday’s earnings are expected to show quarterly earnings-per-share of $20.42, according to a FactSet consensus analyst estimate, but investors see those numbers coming in higher. The Bank of America trading desk is reporting a buyside whisper number for third-quarter EPS of $22.17. That’s based on an informal poll of buyers conducted over the past week. The reason for the upside is that artificial intelligence “inference” – or query response – is already being mentioned by Micron as a driver of demand for their chips. This is a trend that’s expected to continue. “[Micron] has been citing strength in ‘inference’ and agentic adoption. While hyperscalers and other semis have of course discussed agentic, the idea of agentic AI is being cited [as] a meaningful demand driver already, not out there in the future,” Bank of America traders wrote in a June 22 commentary. MU YTD mountain Micron, YTD Other Wall Street banks are feeling similarly bullish on Micron stock, pushing price targets above the FactSet consensus of $1,092. Needham analyst N. Quinn Bolton raised the bank’s 12-month price target for the stock to $1,550 from $500 on Monday. Needham’s third-quarter EPS estimate is $20.97. Analyst Mark Li at Bernstein boosted his price target for Micron to $1,300 from $510 on Monday. He has a year-end 2026 EPS estimate of $67.39, higher than Needham’s year-end estimate of $64.62. Morgan Stanley is also above the consensus for Micron’s EPS, projecting $21.31 for the third quarter. The bank has a “base case” price target on the stock of $1,050, with a “bull case” of $1,650 and a “bear case” of $675. Morgan Stanley sees shortages for memory on core components like DRAM and NAND overshadowing potential drags on the stock in the form of higher capital expenditures or limited disclosure on customer deals. “The stock may go down if there’s limited new information,” Joseph Moore at Morgan Stanley wrote in a Monday note to clients. “But in that [case] we would be looking to add to positions as new disclosures don’t change what we know – which is that customers see DRAM as increasingly tight over a multiyear time horizon – something not priced in at 9.3x our new FY27 EPS.” Not everyone on the Street is quite as bullish on Micron. Goldman Sachs had a $900 price target on the stock as of June 8, though they also had quarterly EPS considerably above the consensus at $22.07. Goldman analyst James Schneider also stressed disclosures on recent customer deals as important for the stock. “We believe investors expect more color on Micron’s strategic customer agreements, what level of pricing guarantees they contain, and whether additional agreements have been reached,” he wrote to clients on June 8, adding that he expects “further color on whether the current DRAM pricing trend can sustain itself in the coming quarters.”
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