Micron's stock heads for best month in 13 years as bulls see more AI gains ahead

By Emily Bary

The stock is also on track for its longest winning streak in more than four years

There seems to be no stopping Micron Technology Inc.'s stock lately.

The stock is up 2% in premarket trading Tuesday, putting it on track to log its eighth session in a row of gains if it ends the regular session in the black. An eight-day winning streak would make for Micron's (MU) longest since it advanced for 11 sessions in a row in the period that ended Dec. 24, 2019, according to Dow Jones Market Data.

Even without factoring Tuesday's premarket gains, Micron's stock was up 29.3% for the month of March so far through Monday's close. That put the stock on pace for its largest monthly gain since it surged 31.4% in January 2011.

The catalyst for the rally? You guessed it. Micron has cemented itself in Wall Street's eyes as a financial beneficiary of artificial intelligence, and investors are excited about what's to come.

See also: Micron's stock rockets higher as company delivers big, AI-fueled earnings beat

Specifically, Micron's high-bandwidth memory (HBM) product looks crucial for the AI wave. Mizuho analyst Vijay Rakesh wrote late Monday that Micron's HBM prices seem locked in for much of this fiscal year, but the company could see upside toward the end of this year and into next year, driven by "supply tightness."

He noted that Micron's HBM3E offering specifically stacks up well competitively, with roughly 30% lower power consumption. Overall, HBM could grow 100% to 200% on a year-over-year basis, and Micron has the potential to pick up market share. The company is

Shares could see a "re-rating" that's reserved for "AI growth enablers," according to Rakesh, who refers to the idea that the stock could come to fetch a higher multiple. Meanwhile, he flagged that Micron is likely negotiating Chips Act funding from the U.S. government.

He upped his price target on Micron shares to $130 from $124 in his latest note, while sticking with a buy rating.

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Rosenblatt Securities analyst Hans Mosesmann weighed in as well on Micron in a Monday report.

HBM "will not only become one of the top memory categories but may also be the most price-inelastic," he wrote. "Applying historical or conventional DRAM channel checks or eyeballing older semiconductor cycles on a chart is irrelevant to informing us of the level and duration" of what he believes will be the "mother of all" memory cycles.

He has a buy rating and $225 target price on Micron's stock.

-Emily Bary

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03-26-24 0837ET

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