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Artificial intelligence (AI) stocks are doing great — Christopher Daenley thinks so micron technology (NASDAQ:MU) Stocks may be the hottest thing out there. he wrote in a memo featured on StreetInsider.com on Friday. citygroup Analysts argued that Micron’s stock, which was $93 as of Friday, could reach $150 per share within a year. This is a price increase of almost 61%.
How sure is he of that number?
Pretty sure. Mr Dainley has touted Micron as Citi’s “top candidate”.
Is Micron stock a buy?
But does Micron deserve to be the No. 1 pick? Dainley is focused on the short term, saying Micron beat earnings expectations (loss of $0.26 per share) and expects Micron to report second-quarter results next Wednesday. We expect that the guidance will be raised in the next few days. DRAM prices look solid, with Micron shipping large quantities of expensive high-bandwidth memory chips (HBM) to customers ordering AI systems. Nvidia.
Micron probably won’t make a profit this year, but its earnings could exceed $10 a share by 2026. Citi believes the stock is valued at 15x, or $150 per share. Although this is a 50% higher multiple than typical peak profits, Citi’s decision may still be correct. In his 2018, two years before the semiconductor cycle, Micron had earned $11.51 per share, but by all accounts, this current AI revolution was an expansion at the time. It’s much bigger than that.
But what worries me is that everyone has already I know AI is big. There’s no doubt about Nvidia’s huge profit margins, which puts it ahead of Micron competitors SK Hynix and samsung Both are several times larger than Micron in the important HBM market, but they are unlikely to cede market share to Micron without a fight (and price competition).
The seeds of the next semiconductor cyclical slowdown are already being planted today, as companies produce HBM chips at breakneck speed. The risk with buying Micron now is not that it might never reach $150. That means that even if a recession arrives, it may not last very long.
Investors beware.
Should you invest $1,000 in Micron Technology right now?
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Citigroup is an advertising partner of The Motley Fool’s Ascent. Rich Smith has no position in any stocks mentioned. The Motley Fool has a position in and recommends Nvidia. The Motley Fool has a disclosure policy.
Will Micron Technology stock reach $150? 1 Wall Street analysts think so.Originally published by The Motley Fool
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