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Key takeaways
- Shares of Micron Technology rose on Friday, after Morgan Stanley called the memory chip maker a “top pick.”
- Analysts said a shortage of memory chips to meet growing demand, coupled with higher prices, could mean more gains for Micron.
Shares of Micron Technology ( MU ) rose on Friday following bullish comments from Morgan Stanley, which called the memory chip maker a “top pick.”
Shares are up more than 5% near $250 in recent trading. The stock has nearly tripled in value so far this year, with Morgan Stanley indicating it still has room to rise.
Morgan Stanley raised its price target on the stock to a new high of $325 from $220, saying it expects the memory chip maker to benefit from a boom in artificial intelligence-driven demand and higher prices.
Why is this important to investors?
Micron, which provides memory solutions to major AI chipmakers like Nvidia and Advanced Micro Devices, has already seen big stock gains this year, thanks in part to growing demand for hardware to support AI. Some investors may be concerned about whether the stock has peaked, but analysts say they believe it still has room to rise.
In a note to clients Thursday, analysts wrote that shortages in the market for memory chips like those made by Micron could “lead to new highs in earnings power.” Analysts said they believe the stock “has not yet fully priced in the upcoming upside.”
The bullish comments come just days after Mizuho analysts also offered an upbeat assessment of Micron’s outlook, saying they see demand remaining strong next year and 2027.
Wall Street analysts are overwhelmingly bullish on Micron shares, with nine of the 10 analysts with current ratings compiled by Visible Alpha calling it a “buy,” even though it actually rose ahead of their average target with its recent gains.
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