Why Micron Stock Just Popped

Key Points

• Three analysts have raised price targets on Micron in the last two days.

• Forecasts for DRAM, NAND, and HBM demand all look great for the next couple of years.

• 10 stocks we like better than Micron Technology ›

Micron (NASDAQ: MU) stock jumped this morning on some positive comments from Wall Street analysts. Wolfe Research and Susquehanna raised price targets on Micron stock yesterday. Today, Wedbush made it three in a row with a hike to $200.

Micron stock is up 5.4% through 11 a.m. ET.

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What Wall Street likes about Micron stock

Micron makes semiconductors for computer memory -- DRAM and NAND flash memory -- and has become popular with the AI crowd for its high-bandwidth memory, or HBM. Yesterday, Wolfe cited "resilient" pricing for DRAM, and noted NAND flash memory demand is growing due to insufficient hard disk drive supply -- supporting its thesis that Micron stock could hit $180 a share within a year.

Susquehanna added positive words about HBM prices holding up through 2026 -- and posited a $200 price target.

Today, it's Wedbush's turn. In addition to agreeing with Susquehanna's price target, Wedbush agrees that HBM will help profits in 2026. Wedbush explains its price target values Micron at 10x "peak" earnings next year, and argues this estimate could be conservative and based on Micron earning lower gross profit margins that it earned at the last cyclical peak in 2018, according to a note on The Fly.

Translation: Gross margins this time could be better -- and Micron's profits could be, too.

Is Micron stock a buy?

Analysts polled by S&P Global Market Intelligence generally agree that Micron's earnings this year will be 10x what the company earned in 2024, and could double by their peak in 2027, to $13.70 per share.

If "10x forward earnings" is the right price for Micron though, then at today's price of $168 and change, the stock is arguably already overpriced. With Micron stock up 79% over the last year, it may be time to sell.

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.