Why Micron Stock Bounced Back Today
Key Points
Wolfe Research analyst Chris Caso just raised his price target on Micron stock to $1,250 per share.
This analyst sees no end to the Micron bull run -- at least for another couple of years.
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After two days of dispiriting declines, Micron (NASDAQ: MU) stock bounced back on Thursday, closing the day up 11.7% and returning its share price to where it was one week ago -- before the epic sell-off in semiconductor chip stocks.
Wolfe Research helped make that happen.
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Image source: Micron.
Why Wolfe still loves Micron stock
Despite investor worries about the health of the market for artificial intelligence chips, and for the high-bandwidth memory that helps AI systems answer questions, Wolfe clambered out on a limb today to raise its price target for Micron -- to $1,250 per share.
What has Wolfe convinced Micron shares -- up 667% already over the past year -- can gain another 26% over the next 12 months?
Prices for DRAM and NAND keep rising, argues analyst Chris Caso. By the time 2026 is over, Caso predicts DRAM prices could be 200% higher than at the end of 2025, and NAND memory prices could soar 216%. Price inflation will continue into 2017, rising another 17% for both kinds of computer memory.
What's next for Micron in 2027?
Demand for computer memory for AI data centers remains insatiable, and with little increase in supply to keep prices in check in the near term, the analyst believes Micron could rake in as much as $226.5 billion in sales next year, and earn $135 per share in profit.
Past 2027, things become less clear, with the potential for the supply and-demand gap to start closing toward the end of that year. Should Micron and its peers remain disciplined about expanding production, however, "higher pricing [can] persist for longer" than that, "potentially into CY2028."
Long story short: Boom times for Micron could last through 2028, or even 2029 -- and there's still plenty of time to buy this growth stock.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool has a disclosure policy.
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