Micron Target Raised to $500 After Strong Q1 Earnings Beat

This article first appeared on GuruFocus.

Micron (MU, Financials) shares got a lot of attention when Rosenblatt Securities analyst Kevin Cassidy boosted his price target from $300 to $500 and maintained his Buy rating. The decision comes after better-than-expected fiscal Q1 earnings and positive forecasts.Micron’s adjusted profits of $4.78 per share above Wall Street’s expectation of $3.96. Revenue rose 56.6% from the previous year to $13.64 billion, which was also more than expected. The business said that increased pricing for DRAM and NAND and decreased manufacturing costs were the main reasons.Cassidy added that Micron’s performance shows that there will be a steady need for memory chips until 2027. He also claimed that supply would be behind demand for a few years. He thinks that the non GAAP gross margins will hit an all-time high of 68% in the February quarter and that profits will be roughly $36 per share by the end of fiscal 2027.Cassidy said that Micron’s fundamentals are still good as the business takes advantage of the AI driven chip cycle, even if he said that long-term supply contracts might restrict future price rises.Shares of Micron have gone up around 196% this year. Most analysts say the stock is a Strong Buy since demand for AI and data centers is still strong.