On Monday, Citi reiterated its buy rating on Micron Technology (NASDAQ:) with a $175.00 price target. The firm expressed concerns that the stock could face short-term pressure. The focal point of these concerns is the expectation that Samsung (KS:) will qualify for its high rating. Bandwidth (NASDAQ:) Memory (HBM) with NVIDIA (NASDAQ:) in Q3 2024, which could also lead to increased capital expenditures for Samsung.
Citi’s stance comes as Micron Technology, listed on the Nasdaq under the symbol MU, navigates the competitive landscape of the semiconductor industry. Nvidia’s qualification of Samsung’s HBM memory could impact Micron’s position in the market, as HBM memory is a key component in advanced computing systems that require high-speed data processing.
The company’s cautious outlook is based on the potential implications of Samsung’s expected agreement to contract with NVIDIA, a major player in the graphics processing unit market. This development could signal increased competition for Micron, especially if Samsung decides to increase its investments in production capacity.
Despite these near-term headwinds, Citi’s price target signals confidence in Micron’s long-term prospects. The $175.00 target remains unchanged, indicating that the firm believes the company’s overall growth trajectory is sound.
Investors and market watchers will be watching the situation closely as Q3 2024 approaches, watching Samsung’s actions and their potential impact on Micron Technology’s market performance.
In other recent news, Micron Technology has seen some significant developments. KeyBanc raised its price target for Micron to $165, while maintaining an Overweight rating, due to potential market share gains in the HBM3e segment amidst the struggles faced by rival Samsung.
Micron’s third-quarter revenue beat expectations, coming in at $6.81 billion. The company’s fourth-quarter revenue forecast, which was driven primarily by high-bandwidth memory chip sales, was in line with expectations.
Analysts from firms including TD Cowen, Piper Sandler, UBS, and Barclays have revised their price targets on Micron, citing promising revenue outlook and strong capital spending plans.
Micron also announced plans to increase its capital expenditures, with a large portion of it directed toward expanding production capacity by building new manufacturing plants.
CFRA maintained a buy rating on Micron, while revising its fiscal 2024 EPS forecast to $1.17, up from the previous estimate of $1.04. Wells Fargo also reiterated its Overweight rating on Micron shares, noting that Micron has received significant government incentives.
Bank of America Securities also maintained a buy rating on Micron, highlighting the growth opportunities in high-capacity DDR5 storage and data center SSDs due to increasing demand from both AI and traditional servers.
InvestingPro Insights
In light of Citi’s recent endorsement of Micron Technology (NASDAQ:MU), it’s important to consider some key financial metrics and expert analysis. According to InvestingPro data, Micron has a large market cap of $126.7 billion and has seen revenue grow 17.6% in the past 12 months as of Q3 2024. Despite the challenging market conditions, the company has managed to maintain a gross profit margin of 11.42% over the same period.
InvestingPro’s tips highlight that Micron has raised its dividend for three years in a row, reflecting its commitment to shareholder returns even as the company faces stiff competition. Furthermore, analysts have revised their earnings upward for the coming period, indicating optimism about Micron’s financial performance. This is especially important as the company faces potential competition from Samsung, which has acquired NVIDIA’s HBM certification.
For investors looking to dig deeper into Micron’s financial health and future prospects, InvestingPro offers additional insights. There are 20 more InvestingPro tips available, which can be accessed by visiting https://www.investing.com/pro/MU. To enhance your investment research experience, use coupon code Pro News 24 Get up to 10% off your Pro annual subscription and Pro+ annual or semi-annual subscription.
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