Citi Optimistic on Micron and Applied Materials Outlook
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Source: stocktwits
- Micron Earnings Outlook: Citi expects Micron to benefit from 'elevated' gross margins and high memory prices in 2023, with adjusted earnings per share projected at $19.72 and revenue at $34.5 billion for Q3, indicating strong profitability and market demand.
- Price Target Increases: Deutsche Bank raised Micron's price target from $1,000 to $1,500, implying a 47% upside potential, reflecting ongoing concerns about the supply-demand imbalance in memory chips, which is expected to persist into the second half of 2026 and 2027.
- Positive Outlook for Applied Materials: Citi analyst raised Applied Materials' price target from $550 to $710, suggesting a 25% upside potential, as the company is anticipated to benefit from increasing demand for NAND memory equipment, highlighting strong market demand for advanced chip manufacturing.
- Retail Trader Sentiment Shift: While retail sentiment for Micron remains 'bearish', sentiment for Applied Materials has shifted from 'bullish' to 'neutral', reflecting differing market expectations for the two companies, especially as Micron's stock has risen over eightfold and Applied Materials has more than tripled in value over the past 12 months.
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Analyst Views on MU
Wall Street analysts forecast MU stock price to fall
26 Analyst Rating
24 Buy
2 Hold
0 Sell
Strong Buy
Current: 1043.190
Low
235.00
Averages
336.12
High
500.00
Current: 1043.190
Low
235.00
Averages
336.12
High
500.00
About MU
Micron Technology, Inc. provides memory and storage solutions. The Company delivers a portfolio of high-performance dynamic random-access memory (DRAM), NAND, and NOR memory and storage products through its Micron and Crucial brands. The Company's products enable advancing in artificial intelligence (AI) and compute-intensive applications. Its segments include Cloud Memory Business Unit (CMBU), Core Data Center Business Unit (CDBU), Mobile and Client Business Unit (MCBU) and Automotive and Embedded Business Unit (AEBU). CMBU is focused on memory solutions for large hyperscale cloud customers, and high bandwidth memory (HBM) for all data center customers. CDBU is focused on memory solutions for mid-tier cloud, enterprise, and OEM data center customers and storage solutions for all data center customers. MCBU is focused on memory and storage solutions for mobile and client segments. AEBU is focused on memory and storage solutions for the automotive, industrial, and consumer segments.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Surge in Data Center Spending: AI hyperscaler spending is projected to reach between $180 billion and $190 billion in 2027, with NVIDIA forecasting over $1 trillion, which will sustain demand for memory chips and ensure Micron can maintain elevated prices.
- Stock Valuation Remains Attractive: Despite a 250% increase in 2026, Micron's stock trades at a forward P/E ratio of 16.4, indicating it is still reasonably valued, and if analysts' predictions hold, the stock could easily double again in the next year.
- Investment Opportunity Emerges: With the earnings report set for June 24, investor optimism around Micron could drive the stock price higher, especially given the strong market demand and positive financial outlook, making it a focal point for investors.
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- Apple's Price Increase Signals: Apple CEO Tim Cook indicated that the company will raise prices due to rising memory and storage chip costs, suggesting that memory prices are unlikely to decrease soon, which exacerbates supply-demand imbalances and drives up related chip stocks.
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- Significant Price Target Increase: Wedbush raised Micron Technology's price target from $500 to $1,300, indicating strong confidence in the company's future growth, particularly as demand from artificial intelligence exceeds expectations, which is likely to drive further stock price increases.
- Sustained Market Demand: Wedbush anticipates that the demand for memory driven by AI systems will continue into 2027 or 2028, providing investors with a longer investment horizon and indicating that Micron will continue to benefit from this trend in the coming years.
- Optimistic Supply-Demand Outlook: Analysts noted that an oversupply of memory chips is unlikely in the next 18 months, which is crucial for Micron, as memory stocks typically face price declines when there is an oversupply in the market.
- Importance of Upcoming Earnings Report: Micron is set to release its next earnings report on June 24, and investors will closely monitor whether AI demand is strong enough to support higher profit estimates and Wall Street's rising price targets.
See More
Micron Technology Set for Quarterly Earnings Release Amid AI Boom
- Memory Chip Shortage Continues: Micron's DRAM and NAND memory chips are in high demand, particularly in AI computing units, and despite supply shortages, the company is expected to continue strong revenue growth this quarter, further solidifying its market position.
- Surge in Data Center Spending: AI hyperscaler spending is projected to reach between $180 billion and $190 billion in 2027, with NVIDIA forecasting over $1 trillion, which will sustain demand for memory chips and ensure Micron can maintain elevated prices.
- Stock Valuation Remains Attractive: Despite a 250% increase in 2026, Micron's stock trades at a forward P/E ratio of 16.4, indicating it is still reasonably valued, and if analysts' predictions hold, the stock could easily double again in the next year.
- Investment Opportunity Emerges: With the earnings report set for June 24, investor optimism around Micron could drive the stock price higher, especially given the strong market demand and positive financial outlook, making it a focal point for investors.
See More
Inflation Data Gains Importance After Fed Meeting
- Fed Policy Shift: New Chairman Kevin Warsh's hawkish signals during this week's FOMC meeting led to stock pullbacks and bond market pressure, with the 2-year Treasury yield spiking above 4.21%, indicating accelerated market expectations for an interest rate hike.
- Rising Inflation Expectations: The core PCE for May is projected to rise by 0.37%, up from 0.24% in April, putting additional pressure on the Fed's inflation forecast, which has been raised to 3.3% for 2026.
- Increased Market Risks: With core PCE potentially exceeding a monthly increase of 0.21%, the risk of tightening financial conditions rises, leading to further increases in the 2-year yield even if oil prices fall, posing potential downside risks for equities.
- Cautious Investor Sentiment: Following the SpaceX IPO, market sentiment has turned fragile, with SpaceX shares down about 4% for the second consecutive day despite gains in chip stocks, raising concerns about a potential market pullback amid upcoming large IPOs.
See More
Stocks Rise as Apple Signals Price Increases for Chips
- Market Performance: U.S. stocks closed higher on Friday, recovering from losses earlier in the week, with the S&P 500 up about 1% for the week, reflecting optimism about the economic outlook, particularly as crude prices fell due to tankers exiting the Strait of Hormuz.
- Apple's Price Increase Signals: Apple CEO Tim Cook indicated that the company will raise prices due to rising memory and storage chip costs, suggesting that memory prices are unlikely to decrease soon, which exacerbates supply-demand imbalances and drives up related chip stocks.
- Amazon's Chip Business Potential: Amazon shares rose after reports of talks to sell custom chips to third-party data centers, with CEO Andy Jassy estimating that the chip business could generate an annual revenue run rate of $50 billion, a figure comparable to analyst estimates for AMD, highlighting Amazon's potential in the semiconductor market.
- Upcoming Earnings Reports: Next week, earnings will be released from FedEx and its recently spun-off FedEx Freight, along with significant reports from memory chipmaker Micron and other key companies, as the market closely monitors these data points to assess economic health.
See More
US Stocks Rebound: Tech Sector Leads Market Recovery
- Market Rebound: Following Wednesday's hawkish Fed surprise, the S&P 500 rose by 1% on Thursday, bouncing back from a 1.2% decline, indicating a renewed optimism about the economic outlook.
- Tech Sector Surge: Driven by bullish semiconductor news, the Nasdaq Composite increased by 1.5%, with Intel's stock soaring 10.4%, reflecting heightened investor confidence in American chip manufacturing.
- Geopolitical Impact: President Trump signed an interim peace deal with Iran, reopening the Strait of Hormuz for 12.5 million barrels of oil to pass safely over the next 60 days, although this has put downward pressure on oil prices.
- Divergent Stock Performances: While Caterpillar's 3.3% gain contributed 192 points to the Dow, IBM's 5% drop weighed on overall performance, highlighting the mixed reactions across different sectors in the market.
See More
Trump Signs Interim Peace Deal with Iran, Impacting Oil and Tech Stocks
- Iran Peace Agreement: President Trump signed an interim peace deal at the Palace of Versailles, reopening the Strait of Hormuz for 12.5 million barrels of oil to pass safely over the next 60 days, although sanctions remain in place, which could lead to increased global supply and impact oil prices and market sentiment.
- Tech Stock Surge: Trump's social media announcement of a partnership between Apple and Intel to build chips in America, despite lacking corporate confirmation, resulted in Intel's stock jumping 10.4%, boosting the entire semiconductor sector and reflecting market optimism towards tech collaborations.
- Market Volatility: The Nasdaq Composite rose 1.5%, but SpaceX's stock fell 9.9%, dragging down the Nasdaq-100 index, indicating volatility and uncertainty among new market entrants, prompting investors to stay alert to market dynamics.
- Macroeconomic Impact: The Dow Jones Industrial Average gained only 0.4%, highlighting pressure on traditional sectors like IBM amidst a strong rebound in tech stocks, reflecting market differentiation in sector performance and investor focus.
See More
Micron Technology Receives Boost from Wall Street Confidence
- Significant Price Target Increase: Wedbush raised Micron Technology's price target from $500 to $1,300, indicating strong confidence in the company's future growth, particularly as demand from artificial intelligence exceeds expectations, which is likely to drive further stock price increases.
- Sustained Market Demand: Wedbush anticipates that the demand for memory driven by AI systems will continue into 2027 or 2028, providing investors with a longer investment horizon and indicating that Micron will continue to benefit from this trend in the coming years.
- Optimistic Supply-Demand Outlook: Analysts noted that an oversupply of memory chips is unlikely in the next 18 months, which is crucial for Micron, as memory stocks typically face price declines when there is an oversupply in the market.
- Importance of Upcoming Earnings Report: Micron is set to release its next earnings report on June 24, and investors will closely monitor whether AI demand is strong enough to support higher profit estimates and Wall Street's rising price targets.
See More
