Bank of America analysts are showing optimism towards Micron Technology (NASDAQ:MU), emphasizing the potential growth opportunities in artificial intelligence (AI) and the evolving industry landscape.
After meeting with key figures at Micron, including the CFO, CVP, and IR representatives, Bank of America has restated its Buy rating for the company and set a price target of $170. The bank highlighted the strong pricing trends, supply management, and a shift towards AI computing and enterprise storage products as key factors driving their positive outlook.
The analysts noted Micron’s plans to increase its market share in high bandwidth memory (HBM) to 20-25% by 2025 in a TAM exceeding $20 billion. This strategic move signifies a significant expansion from the current market share and TAM metrics. The company’s sold-out status at determined prices through the coming year indicates robust demand and clear visibility on the horizon.
Bank of America also pointed out the emerging potential in Edge AI, particularly in phones and PCs, as a growth driver in the upcoming years. Micron’s technological superiority in HBM, with a 30% performance advantage over competitors, along with a strong balance sheet, positions the company as a leader in the industry.
Furthermore, Micron’s focus on HBM is expected to bolster pricing in the DRAM segment, alongside an anticipated improvement in gross margins driven by a mix shift towards higher-margin products. The bank highlighted the company’s preparedness for competitive scenarios, emphasizing the potential upside should delays occur in competitors’ qualifications.
In conclusion, Bank of America’s positive stance on Micron is underpinned by the company’s broad exposure to AI, disciplined supply management, and the potential for substantial growth and enhanced financial performance. This reinforces Micron’s position as a key player in the technology sector with promising prospects ahead.
