Micron (MU) Draws Outperform Initiation on AI Memory Tailwinds

Micron Technology, Inc. (NASDAQ:MU) is 1 of the AI Stocks Analysts Are Watching. On January 22, William Blair expert Sebastien Naji initiated sum connected the banal with an “Outperform” rating. The steadfast sees Micron well-positioned to present crisp nett maturation amid AI-fueled representation bottlenecks.

According to William Blair, the AI-driven representation roar is sustainable, astatine slightest for the adjacent mates of years.

While valuation progressively embeds important maturation expectations, we judge shares tin proceed to enactment connected the backmost of a multiyear, AI-driven merchandise rhythm characterized by choky supply. We estimation a just worth for shares of astir $450.

The steadfast believes that a multiyear representation upcycle volition assistance pricing and margins, peculiarly by HBM (high-bandwidth memory). Customers person been pursuing higher-performance products with higher mean selling prices, peculiarly due to the fact that representation has go a bottleneck successful AI systems.

The steadfast anticipates Micron to turn its HBM gross 164% successful fiscal 2026 and 40% successful fiscal 2027, being the fig 2 subordinate successful the market. Since HBM chips outgo much and person amended margins than Micron’s different products, its income are apt to effect successful a 275% emergence successful adjusted EPS implicit the adjacent 2 years, it noted.

William Blair forecasts MU to study an adjusted net of $41.77 a stock successful fiscal 2027, up from $8.29 successful fiscal 2025.

Memory Supercycle Driving Record Profitability. Micron has been a U.S. semiconductor stalwart serving arsenic 1 of the 3 large planetary representation suppliers (alongside Samsung and SK Hynix). Access to representation has go a cardinal bottleneck successful AI racks/systems, expanding request for much performant, higher bandwidth representation solutions. Against a backdrop of constricted proviso that is apt to stay successful spot into 2027, Micron is poised to payment from important ASP maturation and higher borderline products. We expect the institution to turn non-GAAP EPS implicit 275% implicit the adjacent 2 years.

Micron Technology, Inc. (NASDAQ:MU) develops and sells representation and retention products for information centers, mobile devices, and assorted industries worldwide.

While we admit the imaginable of MU arsenic an investment, we judge definite AI stocks connection greater upside imaginable and transportation little downside risk. If you're looking for an highly undervalued AI banal that besides stands to payment importantly from Trump-era tariffs and the onshoring trend, spot our escaped study connected the best short-term AI stock.

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Disclosure: None.