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Wall Street analysts raised their price objectives on Micron's stock following a strong Q1 report.

Micron (Nasdaq: MU) reported better-than-expected revenue in its Q1 earnings report and provided strong Q2 guidance, sending its shares surging ahead of the market opening. Subsequently, several major Wall Street investment firms hiked their price targets on the stock, warming up to the stock.
 

Micron Pops 5.8% in Premarket

Shares of Micron jumped 5.8% in premarket trading Thursday after the chipmaker’s Q1 earnings and guidance beat Wall Street estimates. The better-than-anticipated report comes despite the soft guidance that Micron previously issued for this quarter.

Notably, the company reported a loss per share (EPS) of $0.95 in the quarter, better than the expected loss of $1.01. Micron generated $4.73 billion in Q1 revenue, above the estimated $4.55 billion. 

Micron CEO Sanjay Mehrotra said he expects memory prices to recover in 2024 and increase further in 2025 after seeing a significant decline this year. In addition, demand for flash storage and dynamic random access memory (DRAM) is also anticipated to improve next year, the company said.

The firm expects Q2 revenue to be in the range of $5.1 billion to $5.5 billion, topping the consensus estimates of $5.03 billion. Also, it estimates several hundred million” dollars in high-bandwidth memory (HBM) revenue in fiscal 2024 and expects further gains in the year after. 
 

Micron Capitalizing on AI Chip Demand

Akin to many of its chipmaking peers, Micron staged an impressive stock market performance in 2023.

Amidst the ongoing AI boom, the demand for processing power and high-end chips saw a dramatic increase, propelling the stock prices of semiconductor companies to multi-month highs. Although Nvidia (NASDAQ: NVDA) took the spotlight, Micron’s shares also soared, rising more than 56% year-to-date.

“Demand for AI servers has been strong as data center infrastructure operators shift budgets from traditional servers to more content-rich AI servers.”

– the company said.

HBM refers to one of Micron’s most profitable offerings, partly due to the technical complexity involved in its assembly. Meanwhile, Mehrotra said the company is in the final stages of qualifying for its HBM3E chips for use in Nvidia’s upcoming Grace Hopper GH200 and H200 platforms. With the demand for top-notch AI chips constantly rising, major chipmakers, including AMD (Nasdaq: AMD) and Intel (Nasdaq: INTC), recently introduced their most powerful rival products. 

In the wake of its strong quarterly report, several Wall Street giants raised their price targets on Micron stock, including UBS (from $90 to $95), Stifel (from $76 to $80), Citi (from $88 to $95), and Goldman Sachs (from $85 to $97).

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