Tuesday, on the heels of a meeting with Micron Technology (NASDAQ:MU)'s Chief Financial Officer, Citi analyst Christopher Danely upheld a Buy rating and a $150.00 price target for Micron Technology (NASDAQ:MU) shares, representing significant upside from the current trading price of $99.26. The discussion centered on the current state of the DRAM market. Danely expressed confidence in Micron's outlook, citing a projected turnaround in the DRAM market beginning in the first quarter of 2025. According to InvestingPro data, the company has shown impressive momentum with a 17.94% return over the past week.
According to Danely, the data center segment, which constitutes half of Micron's revenue, is showing consistent growth each quarter. This strength is a key factor in the analyst's positive assessment of the company's future performance. InvestingPro analysis reveals strong fundamentals, with a current ratio of 2.72 indicating solid liquidity and a moderate debt level. Conversely, the areas of the business that have been underperforming, specifically the PC and cell phone DRAM markets that make up 25% of Micron's revenue, are expected to see improvements starting in the second quarter of 2025.
Micron's financial health and market position have been under scrutiny, with the DRAM market's cyclical nature impacting the company's performance. The company maintains a strong market position with a market capitalization of $110.59 billion and impressive revenue growth of 79.8% over the last twelve months. The anticipated recovery in the DRAM market is seen as a pivotal moment that could bolster Micron's business prospects. For deeper insights into Micron's valuation and growth potential, investors can access comprehensive analysis through InvestingPro's detailed research reports.
The analyst's remarks underscore a sense of optimism for Micron's trajectory, especially as the company navigates the challenges and opportunities within the dynamic DRAM market. The emphasis on the data center end market as a growth driver aligns with broader industry trends that see data center demand as a critical component of technological expansion.
Micron Technology, a key player in the semiconductor industry, continues to adapt to the shifting demands of the technology sector. With Citi's reaffirmed Buy rating and price target, investors are given a snapshot of the company's potential as it moves toward what is hoped to be a more favorable market environment in the upcoming quarters.
In other recent news, Nvidia (NASDAQ:NVDA)'s shares climbed due to positive revenue growth news from Foxconn (SS:601138), its server assembly partner. Foxconn reported a 15% revenue increase, surpassing expectations due to continued demand for AI infrastructure. This robust performance led to a 3.6% rise in Foxconn's shares and provided a lift to semiconductor stocks.
Meanwhile, Micron Technology's shares held an Overweight rating by KeyBanc despite a dip in the company's F2Q outlook. The company's F1Q performance, bolstered by a 20% quarter-over-quarter increase in data center growth and DRAM revenue, was a positive factor.
TD (TSX:TD) Cowen also sustained a favorable stance on Micron, despite a reduction in the stock's price target. The firm anticipates that calendar year 2026 will be a period of growth for Micron.
However, Citi released a report detailing negative implications for the U.S. semiconductor equipment industry, following Micron's recent financial disclosures. The report reflects concerns over the semiconductor equipment sector's outlook.
Needham, a financial services firm, adjusted its outlook on Micron, reducing the stock's price target while maintaining a Buy rating. The revision came in response to Micron's recent financial update, which included a modest earnings beat but offered guidance that fell short of expectations. Despite these challenges, high-bandwidth memory (HBM) and data center DRAM segments are projected to remain robust.
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