Micron Technology Benefits from Soaring AI Demand
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6h ago
0mins
Source: NASDAQ.COM
- Significant Revenue Growth: Micron Technology reported a 57% year-over-year increase in total sales to $13.6 billion in the fiscal first quarter of 2023, primarily driven by strong performance in its cloud services division, highlighting the robust demand for memory chips in AI data centers.
- Improved Cash Flow: The company reported $3.9 billion in adjusted free cash flow for the same quarter, which is expected to be utilized for future stock buybacks and production capacity expansion, thereby enhancing shareholder value.
- Huge Market Potential: Management projects that the total addressable market for high-bandwidth memory devices will reach $100 billion by 2028, growing at a 40% compound annual growth rate, providing Micron with sustained growth momentum.
- Low Stock Valuation: Despite a 254% increase in stock price over the past year, Micron's forward P/E ratio stands at just 11.5, significantly lower than the S&P 500 average of 22, indicating that its investment potential in the AI hardware sector remains undervalued.
Analyst Views on MU
Wall Street analysts forecast MU stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for MU is 336.12 USD with a low forecast of 235.00 USD and a high forecast of 500.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
26 Analyst Rating
24 Buy
2 Hold
0 Sell
Strong Buy
Current: 399.650
Low
235.00
Averages
336.12
High
500.00
Current: 399.650
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 Compute and Networking Business Unit (CNBU), Mobile Business Unit (MBU), Embedded Business Unit (EBU), and Storage Business Unit (SBU). CNBU segment includes memory products and solutions sold into the data center, PC, graphics, and networking markets. MBU segment includes memory and storage products sold into the smartphone and other mobile-device markets. EBU segment includes memory and storage products and solutions sold into the intelligent edge through the automotive, industrial, and consumer embedded markets. SBU segment includes SSDs and component-level storage solutions sold into the data center, PC, and consumer markets.
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.
