Micron Technology (MU) experienced a volatile trading session, initially dropping 3% on Thursday before rebounding sharply with a 9.3% gain on Friday morning. This fluctuation follows a Bernstein report indicating a shortage in the DRAM and NAND flash memory markets, driven by surging demand from AI chip manufacturers like Nvidia and AMD. While this demand has led to increased bidding and rising prices, Bernstein cautioned that some original equipment manufacturers (OEMs) may need to reduce their purchases, potentially slowing Micron’s profit growth.
Despite these concerns, the near-term outlook remains robust, with DRAM prices soaring 57% and NAND prices rising 65% in April compared to Q1 averages. Bernstein projects Micron will earn nearly $19 per share in the May quarter, with sales anticipated to grow 260% to $33.5 billion. Analysts expect Bernstein’s $510 price target for Micron could be revised upward, reflecting confidence in the company’s ability to capitalize on current market dynamics.
Source: fool.com