Analysts at JPMorgan said in a note this week that they expect a strong outlook from Micron Technology (NASDAQ:MU) despite the early April Taiwan Earthquake impacting current quarter revenues.
Analysts predict significant growth for Micron, citing factors like a strong HBM (High Bandwidth Memory) ramp for Nvidia's new GPUs and continued price increases for both DRAM and NAND memory. JPMorgan anticipates gross margins reaching 34-35% range, exceeding expectations.
"The memory industry is in the early stages of the cyclical up-cycle," say analysts at JPMorgan, expecting continued positive revisions throughout 2024 and 2025. They emphasize the unprecedented growth of HBM, stating, "HBM DRAM is not only a new demand driver in the industry, but is the fastest growing new memory driver in the history of the memory market." This rapid growth leads JPMorgan to suggest a potential peak price for Micron stock closer to $200.
JPMorgan acknowledges some investor caution due to Micron's high valuation but believes the positive earnings revision story justifies investor confidence. While some analysts raised concerns about lower HBM yields impacting Q3 margins, JPMorgan maintains its bullish outlook, citing recent company guidance.
Overall, JPMorgan has a strong positioning score of 8 (out of 10) for Micron. It also sees an implied stock price increase of 13%.