Micron Technology has experienced a remarkable increase in stock value over the past year, almost doubling its worth. This growth can be attributed to the growing demand for high-bandwidth memory in AI servers, as data centers invest in increasing their data capacity, network speed, and processing power.
The limited availability of memory chips has contributed to higher selling prices, particularly for DRAM, which accounts for a significant portion of Micron’s revenue. The company’s revenue has already shown significant growth, with a 57% increase year over year in the fiscal 2024 second quarter.
Micron management is optimistic about the company’s future prospects, anticipating revenue to reach $6.6 billion in the current quarter from $3.8 billion in the same period last year. Additionally, profitability is expected to improve substantially, contributing to a positive outlook for the stock. Analysts expect earnings per share to reach $10.05 by fiscal 2026, supporting Baird’s price target of $150 – an impressive increase of 25% from its current market value.
Given this information, it seems that Micron stock is currently trading at a reasonable valuation based on fiscal 2026 earnings estimates. If analyst predictions hold true and earnings continue to grow at this rate over the next 12-18 months, then Micron stock could be an attractive investment opportunity for those looking for continued growth potential.
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