Benzinga - by Anusuya Lahiri, Benzinga Editor.
Micron Technology Inc (NASDAQ:MU) shares are trading higher after Mizuho reiterated a Buy rating and raised its price target from $124 to $130.
Driven by accelerated AI adoption, analyst Vijay Rakesh noted the HBM market growing at a three-year 2023-2026 CAGR of ~65% to reach $17.5 billion by calendar 2026, as HBM GB content/GPU grows >2x from ~140GB to ~280GB with Micron positioned to benefit with share gains.
Rakesh noted that a 12-layer 36GB HBM for 288GB stack for B200/MI400 into the first half of 2025 could be a major catalyst.
Micron sees its HBM and TSV capacity ramps in line to achieve a target of ~25% share in 2025. Micron noted its HBM3E sees advantages vs. peers with lower power (~30%) driving customer traction.
Rakesh noted Micron has HBM prices in fiscal 2024 locked with early 2025 pricing commitments, but supply tightness could drive the upside.
He noted Micron’s CHIPS Act funding is currently being negotiated to balance US/Asia growth.
Rakesh reiterated his May quarter revenue and EPS of $6.6 billion and $0.45 (consensus $6.5 billion and $0.44), fiscal 2024 from $24.5 billion and $0.89 to $24.5 billion and $0.75 (consensus $24 billion and $0.42), fiscal 2025 from $34.6 billion and $7.32 to $34.6 billion and $7.59 (consensus $34.6 billion and $7.54), and fiscal 2026 from $39.4 billion and $9.68 to $39.4 billion and $9.46 (consensus $35.7 billion and $8.79).
For Micron, Rakesh continued to see sustained traction at Nvidia Corp (NASDAQ:NVDA) but also others ramping AI accelerators, including Advanced Micro Devices, Inc (NASDAQ:AMD), Intel Corp (NASDAQ:INTC), and custom solutions (TPU, MTIA, Athena, Trainium/Inferentia).
Capacity expansion is also crucial, as Micron could be expanding 10x in 2024 with fungible DDR production, though SK and Samsung are also ramping to 100kwpm (from 70k) and 70kwpm (from 30k), Rakesh added.
Price Action: MU shares traded higher by 1.85% at $119.30 on the last check Tuesday.
Photo via Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.