DA Davidson initiated coverage of Micron (NASDAQ: in) on Tuesday, April 28, giving it a “buy” rating and an unprecedented price target of $1,000.
In the research note, the company said that artificial intelligence (Amnesty International) led to a “longer-than-usual memory cycle,” adding that compute deployment and demand generation continue to reinforce each other in a positive feedback loop.
“We believe AI is creating a longer-than-usual memory cycle as compute deployment and demand generation exist in a positive feedback loop, creating a structurally higher ceiling for memory pricing and demand.” wrote analyst Jill Loria.
This in turn drives up memory prices and demand caps, and DA believes the market is still underestimating Micron’s position to capitalize on, especially regarding its power. Semiconductors Their peers.
The new price target of $1,000 is currently the highest estimate on Wall Street, and beats the previously more bullish estimate of $700, which came in… Just one day ago From Milius’s research. Compared to the recent closing price of $524, the DA Davidson number indicates an upside of approximately 90%.
Is Micron the new leader of computing?
As mentioned earlier, Loria’s bullish position is based on the idea that the memory market is no longer constrained by the traditional cycle. This means that while demand has historically had a ceiling, defined by exaggerated capacity expansions and eventual compression margins, AI has fundamentally changed this dynamic.
Now, the memo says, each wave of computing deployment helps create entirely new use cases, effectively generating new demand. Likewise, Loria highlighted the increasing importance of long-term supply arrangements. More specifically, Micron’s reliance on multi-year agreements improves demand visibility and adds a layer of price stability that the industry has historically lacked.
Furthermore, the analyst noted Micron’s manufacturing superiority, citing four consecutive generations of leadership in DRAM and three in NAND. This node advantage compounds over time by reducing costs and enhancing competitiveness, he says.
“The market continues to frame the cycle through the lens of previous recessions, which appears to be underestimating the demand environment, especially for the rest of the semi-complex companies… Combined with the micron node leadership and what we see as a long-term earnings strength story, we see a meaningful uptrend for stocks.” The note concluded.
Is Micron stock a buy?
DA Davidson’s new number becomes even more impressive when compared to MU’s average stock price target for the next 12 months, which stands at $574.67. Based on 30 Analyst notes Track it TipRanks In the past three months, the average forecast indicates a rise of 9.55%.
Overall, with 27 “buy” ratings recorded, three “hold” ratings, and no “sell” ratings recorded on the same platform, Micron stock has a “strong buy” consensus on Wall Street.
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