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Micron Technology’s (Nasdaq: MU) stock surged today after Bank of America Securities raised the company’s price target from $120 to $144, maintaining a Buy rating. The increase is attributed to Micron’s anticipated growth driven by the surging demand for high-bandwidth memory (HBM) in artificial intelligence (AI) applications.

BofA Raises Micron Technology’s Price Target to $144 Based on HBM Demand

Bank of America Securities has raised Micron Technology’s price target from $120 to $144, maintaining a Buy rating on the stock.

The increase reflects the company’s anticipated growth, primarily driven by the rising demand for high-bandwidth memory (HBM), essential for artificial intelligence (AI) applications. Analysts noted that HBM consumption is significantly higher than traditional DDR DRAM, using three times more wafer, indicating a substantial increase in material use.

The demand for HBM is expected to grow at a compound annual growth rate (CAGR) of 48% between 2023 and 2027, potentially creating a market worth over $20 billion. Micron is projected to increase its market share in the HBM sector from less than 5% to the mid-20s percent.

This expansion could contribute to record overall company sales in 2025 and 2026. The growth in memory demand extends beyond traditional computing, benefiting from the widespread adoption of AI across various devices.

Bank of America Securities’ revised price objective for Micron is based on an updated price-to-book (P/B) multiple of 2.8 times for 2025, up from 2.2 times but still within the historical range of 0.8 to 3 times. As of the time of writing, Micron Technology’s stock price was $125.82, up $7.93 (+6.73%). The company, listed on Nasdaq under the symbol MU, had a trading volume of 13,127,883 shares, with an average volume of 18,960,778.

Micron’s 52-week stock price range is between $56.01 and $126.72. The company has a market capitalization of $139.252 billion and a negative P/E ratio of -34.37. A forward dividend and yield of $0.46 (0.39%) were reported, with the ex-dividend date on March 28, 2024.

Is the Market Looking Beyond the Magnificent Seven for Gains?

The S&P 500 achieved its best start since 2019, climbing 10% in the first quarter of 2024, despite declines in shares of Apple (Nasdaq: AAPL) (-11%) and Tesla (Nasdaq: TSLA) (-almost 30%).

Nvidia (Nasdaq: NVDA), Meta Platforms (Nasdaq: META), Microsoft (Nasdaq: MSFT), and Amazon.com (Nasdaq: AMZN)—now dubbed the new “Fab Four”—continued their growth and outpaced the broader market, with Nvidia particularly notable, jumping more than 80% fueled by demand for AI computing power.

The Fab Four accounting for nearly half of the S&P 500’s first-quarter advance, indicating a diversification in market leadership and a broadening rally beyond the original Magnificent Seven, as investors expect a rotation out of extensive tech stocks into other sectors driven by the anticipated earnings performance of the broader market as the year progresses.

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