Not all market giants have reported their newest quarterly earnings but. As Wednesday’s buying and selling session involves an in depth on March twentieth, Micron (NASDAQ:MU) is gearing as much as launch its fiscal Q2 2024 outcomes.
Forward of the print, the reminiscence large finds itself at a pivotal juncture the place rising reminiscence traits meet the continued integration of AI-accelerated computing. The corporate is dedicated to seizing the alternatives introduced by the speedy enlargement of AI and its strategic collaboration with Nvidia to distribute HBM3e reminiscence alongside their GPUs exemplifies this gameplan, making the corporate well-placed to leverage the appreciable potential of a projected $1 trillion AI server retooling sector.
The partnership with its chip large peer is on Citi analyst Christopher Danely’s thoughts when assessing Micron’s prospects, and in a great way.
“We count on the corporate to put up upside to Consensus and elevated steerage for F3Q24 given sturdy DRAM pricing and shipments of higher-priced, higher-margin, Excessive Bandwidth Reminiscence (HBM) which is delivery with Nvidia AI programs,” the analyst defined.
For the quarter, primarily based on increased margins, Danely expects Micron to ship EPS of ($0.28), above consensus at ($0.42). The analyst sees income hitting $5.30 billion, amounting to a 12% sequential enhance, in step with the Avenue’s forecast.
As for the outlook, on account of higher DRAM gross sales, Danely is in search of Micron to information for $6.00 billion in income for FQ3, up 13% quarter-over-quarter, and simply above the Avenue’s $5.98 billion estimate. On the bottom-line, Danely is looking for EPS of $0.26, a long way higher that Wall Avenue’s ($0.10), on account of “increased gross margins on account of better-than-expected DRAM pricing and HBM income.”
Whereas the inventory has carried out effectively over the previous 12 months (up by 63%), it hasn’t matched the show of some friends, however Danely doesn’t see that remaining the case for lengthy.
“MU a number of ought to broaden given different AI shares,” the 5-star analyst summed up. “We count on Micron to ship $100.0 million in HBM reminiscence in F3Q24 and we count on Micron’s a number of to broaden given it’s AI publicity and its friends enlargement.”
Such is Danely’s confidence within the Micron story, he raised his value goal from $95 to a Avenue-high of $150, suggesting the inventory will climb ~60% increased over the approaching months. Unsurprisingly, Danely charges Micron as a Purchase. (To look at Danely’s observe document, click on right here)
Virtually all of Danely’s colleagues agree together with his thesis. The inventory claims a Robust Purchase consensus score primarily based on 25 Purchase rankings and simply 1 Maintain and Promote, every. Nonetheless, the typical goal is somewhat extra modest; at $104.76, the determine represents 12-month returns of ~12%. (See Micron inventory forecast)
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Disclaimer: The opinions expressed on this article are solely these of the featured analyst. The content material is meant for use for informational functions solely. It is vitally necessary to do your personal evaluation earlier than making any funding.