Wall Street analysts are increasingly pushing Micron’s (MU) stock price target towards the $2000 mark. Barclays’ Thomas O’Mailey raised MU’s target from $1175 to $2000 days after the company released its quarterly earnings report. Melius Research raised its price target from $1100 to $2200, while Susquehanna raised their target from $1750 to $2000. The average target currently sits at $1557, still higher than MU’s all-time high. Let’s discuss why analysts are increasingly raising MU’s price target.
Why Is Wall Street Pushing Micron’s Stock Price Target?
Micron (MU) has been one of the biggest beneficiaries of the ongoing AI boom. The company’s memory chips are an essential part in the running of AI platforms. Micron, along with SK Hynix and Samsung, are the big three in the AI memory chip business.
Micron (MU) recently revealed in its quarterly earnings report that its revenue more than quadrupled year-over-year to $41.46 billion, higher than the anticipated $36.28 billion. Earning per share (EPS) also came in higher than expected at $25.11, in contrast to analysts’ $21.05 projection. The report also noted that supply-demand conditions for both DRAM and NAND will remain tight beyond calendar year 2027.
Micron’s (MU) increasingly high stock price target from Wall Street analysts is a reflection of the company’s performance over the last few months. However, there are risks.
Risks Around The Stock
There has been a lot of chatter about a potential AI bubble. Prominent trader Michael Burry also reiterated a similar sentiment, comparing the current scenario to that of the late 90s’ dot com bubble. Chinese hedge fund managers have also expressed concern about a potential AI bubble. A bubble burst could spell disaster for Micron’s (MU) stock price.
Also Read: Micron Stock: Time to Sell? Where Could MU Be in 5 Years
Additionally, Micron (MU), SK Hynix, and Samsung were sued recently in a US District Court in California for allegedly amping up memory prices. The development could pose a challenge to MU’s stock price target.
The re-escalation in the Middle East conflict could also lead to price corrections for Micron (MU). We may see oil price surges and supply chain issues which could lead to a dip in investor confidence.