On Wednesday, Wells Fargo (NYSE:WFC) reiterated its Overweight rating on Micron Technology (NASDAQ:MU), with a price target of $175.00. According to InvestingPro data, analyst targets range from $70 to $250, with the current consensus being strongly bullish at 1.46 (where 1 is Strong Buy).
The firm expressed a positive outlook on Micron's position ahead of its first quarter fiscal year 2025 earnings report, scheduled for December 18, 2024.
InvestingPro analysis suggests the stock is currently undervalued based on its Fair Value model. The analyst highlighted Micron's potential for significant revenue growth in fiscal year 2025 due to disciplined industry dynamics and the company's execution of its solutions portfolio.
Micron's advancements in High Bandwidth (NASDAQ:BAND) Memory (HBM) are a central point of interest for investors, as the company aims to capture over 20% of the HBM market share by calendar year 2025. This market is estimated to be worth more than $25 billion, representing approximately 6% of the industry's bit demand.
Supporting this growth trajectory, InvestingPro data shows impressive revenue growth of 61.59% in the last twelve months, with analysts forecasting a further 52% growth in FY2025. Despite expectations of substantial revenue from this segment, Micron's supply for calendar year 2025 is already sold out, indicating fixed volume and long-term pricing agreements.
The company reported $907 million in customer prepayments at the end of the fourth fiscal quarter of 2024, an increase from $600 million and $756 million at the end of the second and third fiscal quarters of 2024, respectively. These prepayments underscore deepening customer engagement and signal a shift in the HBM versus DDR5 trade ratio as the industry transitions towards the 12-Hi HBM3E and HBM4 technologies.
Additionally, Micron's broad DRAM solutions portfolio is seen as underappreciated, with the firm noting particular strengths in Low Power Double Data Rate 5 (LPDDR5) and high-capacity server R-DIMMs. Micron is well-positioned for Nvidia (NASDAQ:NVDA)'s GB200 ramp, which includes the integration of 384GB HBM3E and 480GB LPDDR5X in its superchips.
For deeper insights into Micron's financial health and growth potential, InvestingPro subscribers can access the comprehensive Pro Research Report, which includes detailed analysis of the company's competitive position and growth metrics among 1,400+ top stocks. The firm anticipates these products to play a significant role in both artificial intelligence and traditional next-generation server upgrades.
In other recent news, Micron Technology has secured a substantial subsidy exceeding $6.1 billion from the U.S. Department of Commerce. This funding is part of an initiative to bolster domestic semiconductor manufacturing, with the construction of facilities in New York and Idaho expected to generate at least 20,000 jobs. An additional investment of $275 million is set to expand Micron's operations in Manassas, Virginia.
Analyst firms Lynx Equity Strategies and Mizuho (NYSE:MFG) have shared their views on Micron's prospects. Lynx highlighted Micron as a potential beneficiary of recent developments in South Korea, while Mizuho reaffirmed its Outperform rating and a $135.00 price target, citing expected growth in the DRAM and HBM industry.
Micron has debuted its 6550 ION NVMe™ SSD, a 60TB data center SSD, and the first of its kind to support E3.S and PCIe Gen5 standards. This product is designed to meet the growing demands of exascale data centers.
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