Micron Technology Inc (NASDAQ:MU)'s data center strength demonstrated in its latest quarterly results is a “positive read across” for other chipmakers, including NVIDIA Corp (NASDAQ:NVDA, ETR:NVD), Broadcom Inc (NASDAQ:AVGO, ETR:1YD), Marvell Technology Group Ltd. (NASDAQ:MRVL) and Advanced Micro Devices Inc (NASDAQ:AMD, ETR:AMD), analysts at the Bank of America believe.
The company earned a price target bump from the bank's analysts after the chipmaker delivered a quarterly beat and raise.
Analysts see the ‘Buy’-rated stock hitting $125. Shares of Micron surged 17.5% to about $112 on Thursday morning.
Micron’s strong report was driven by solid data center demand, including continued growth in sales of its AI-levered high-bandwidth memory (HBM) products, despite increasing macro headwinds, specifically softer PC and phone demand.
Management repeated their call for a record fiscal 2025, raising their HBM market total addressable market to $25 billion-plus, up from $20 billion.
Analysts raised their price target from $110 to $125 and their fiscal 2025 earnings per share (EPS) estimate by 22% to $7.18. They also raised their 2026 EPS estimate by 31% to $9.87.
They see continued growth in AI servers and the recovery of traditional servers offsetting a softer PC and smartphone environment into the 2025 calendar year.
However, they expect a softer fiscal second quarter on seasonality and inventory concerns.
“Micron’s internal inventory remains high at 162 days in the August quarter, a risk to utilization/gross margin,” they wrote.
“Despite a quick ramp, HBM sales remain exposed to the lumpiness of product cycles at just a handful of customers, while the risk of a potential third vendor (Samsung) being qualified and disrupting the market also exists.”