Why Micron Stock Soared in September

September was a real up-and-down month for tech memory and storage specialist Micron Technology (NASDAQ:MU). At different points in those weeks, investors got spooked about companies involved in the monster build-out of artificial intelligence (AI), then turned sharply bullish on many of those companies following predictions of looming shortages. All the while, Micron was the subject of numerous analyst updates, positive and negative, in the run-up to its latest quarterly earnings report.

When the dust cleared, Micron's stock was -- happily, for investors -- well in positive territory. It gained more than 11% over the course of the month.

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Bullish and bearish

That's because the most impactful of those factors was quite positive. In the middle of the month, on successive days, an analysis from Citigroup (NYSE:C) and comments from Intel (NASDAQ:INTC) CEO Lip-Bu Tan predicted significant memory shortages in the near future.

The key reason why, it'll shock very few tech sector followers to learn, is AI. The resources needed to build out AI compute are considerable, including vastly more memory than previous technologies. A shortage in memory makes Micron's wares that much more valuable, and therefore profitable. That was in contrast to growing sentiment earlier in the month that AI has limits, which could cool the hot growth of some hardware makers.

Micron's fiscal fourth quarter results were published on Sept. 30 after market hours, so the period's blowout results didn't play a part in the company's rise that month. However, as typically happens with a high-profile stock, a clutch of analysts issued fresh takes on Micron in the run-up to the earnings release. And quite a few were bullish. Pundits from JPMorgan Chase's (NYSE:JPM) J.P. Morgan, TD Cowen, and DA Davidson, among others, reiterated their equivalents of buy recommendations on the company. This was exacerbated by other positive pundit moves, such as the $1,280-per-share-to-$1,520 price target hike from Baird's Tristan Gerra.

Not deterred by the down notes

Not all developments and analyses regarding Micron were bullish. Wells Fargo's (NYSE:WFC) Aaron Rakers lowered his price target, for one. Another downbeat development was OpenAI's decision late in the month to pause work on several AI models in development, following instances of its AI agents acting in ways not intended for their deployments.

For the most part, though, as a leading memory and storage purveyor in an environment where both goods are poised to become more expensive, Micron is in an excellent position. Those quarterly results would cement this impression and show that the stock remains loaded with potential.

Wells Fargo is an advertising partner of Motley Fool Money. Citigroup is an advertising partner of Motley Fool Money. JPMorgan Chase is an advertising partner of Motley Fool Money. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intel, JPMorgan Chase, and Micron Technology. The Motley Fool has a disclosure policy.