Here's Why Some Analysts Still Think Micron Technology's Stock Can Surge Higher

Micron Technology (NASDAQ: MU) has been a scorching hot growth stock to own. In the past 12 months, it has risen by around 340% in value, as it benefits from strong demand due to artificial intelligence. The company, which sells memory and storage products, has been generating some impressive results that have resulted in the stock being a red-hot buy.

And yet, despite Micron's impressive gains of late, analysts still see more upside ahead for the business, as that soaring demand may not be slowing down just yet.

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Could Micron's stock hit $500?

Analyst price targets vary on Micron. Currently, the consensus average is a price target of around $369, which would imply that the tech stock is already due for a decline. However, analysts change and upgrade their prices over time, especially in a fast-moving tech world.

And analysts have generally been boosting their price targets for Micron's stock recently. This is often the case after the company releases strong earnings numbers and guidance that suggest its future looks more promising than previously expected. Multiple analysts have boosted their price targets to at least $450 within the past couple of months, and one is as high as $500. And if the company's results continue to look impressive, it's hard to argue with those projections.

What's behind the excitement?

The big reason analysts see more room for the stock to run higher is that demand is so strong that memory prices may end up rising higher as a result of shortages. That can give Micron's financials an added boost, and thus, make the stock an even better-looking buy than it is right now.

Micron last reported earnings in December, and its sales rose by 57% to $13.6 billion for the November quarter. For the current quarter, the company is projecting its top line to come in around $18.7 billion, which would translate into a year-over-year growth rate of 132%. With some incredible growth and the potential for it to accelerate further, it's little wonder why analysts remain optimistic about Micron's stock. Currently, it's trading at just 13 times its estimated future earnings, making it look like a bargain buy.

Investors, however, should tread carefully because if there are signs that supply is catching up to demand, then Micron's stock could begin to give back some of its impressive gains. But for now, things continue to look rosy for Micron, and it may not be surprising to see this stock continue to climb even higher this year.

David Jagielski, CPA 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.