Micron seen benefiting from strong memory pricing ahead of fiscal Q3 results

Micron Technology Inc (NASDAQ:MU) is positioned to payment from stronger-than-expected representation pricing trends arsenic it prepares to study fiscal third-quarter results, according to Wedbush analysts, who raised their estimates and terms people up of the release.

Wedbush reiterated its 'Outperform' standing connected Micron and accrued its terms people to $1,300 from $550, citing higher assumptions for DRAM and NAND pricing arsenic good arsenic expectations for continued request tied to artificial quality applications. Shares closed connected Thursday astatine $1,152. 

The analysts wrote that pricing for some NAND and DRAM successful the 2nd calendar 4th accrued by "high treble to adjacent triple digits," exceeding the assumptions Micron utilized successful its anterior guidance. Wedbush present models a 65% quarter-over-quarter summation successful mean selling prices for some DRAM and NAND successful Micron's fiscal 3rd quarter, up from its erstwhile estimation of 40%.

The steadfast wrote that DRAM pricing could beryllium stronger still, noting its manufacture checks suggest Micron whitethorn person realized pricing gains successful enactment with, oregon somewhat amended than, broader marketplace trends. Wedbush added that Micron whitethorn payment from a larger sequential summation successful mean selling prices due to the fact that the institution had acceptable declaration pricing earlier successful the 4th astatine levels beneath those of immoderate Korean competitors.

Wedbush raised its fiscal 3rd 4th gross and earnings-per-share estimates and wrote that, contempt its forecasts being adjacent the apical extremity of statement expectations, Micron inactive has country to outperform, with DRAM pricing remaining the astir important origin influencing earnings.

Looking up to Micron's fiscal 4th quarter, Wedbush expects further gains, modeling an astir 20% summation successful DRAM and NAND pricing during the 3rd calendar quarter. The analysts wrote that pricing for registered DIMMs successful secondary markets climbed done May and that an improving premix toward higher-value server representation modules could supply further upside.

Wedbush besides maintained a affirmative longer-term outlook, penning that request related to AI is apt to stay robust done astatine slightest 2027, portion proviso conditions look improbable to pb to oversupply implicit the adjacent 18 months. The analysts added that caller semipermanent agreements could assistance prolong elevated net levels for longer than successful erstwhile representation cycles.