Strategic Moves in AI and Memory Technology
Micron Technology Inc MU shares have surged after Mizuho reiterated a Buy rating and increased its price target from $124 to $130.
Driven by the rapid adoption of AI technology, analyst Vijay Rakesh highlighted the substantial growth potential in the HBM market. He projected a remarkable three-year CAGR of approximately 65% from 2023 to 2026, leading to a market value of $17.5 billion by 2026. As the HBM GPU content doubles from around 140GB to 280GB, Micron is well-positioned to capitalize on this trend and gain market share.
Rakesh emphasized the significant impact of the introduction of a 12-layer 36GB HBM for 288GB stack for B200/MI400 by the first half of 2025, which could serve as a major catalyst for Micron’s growth.
With Micron’s HBM and TSV capacity expansion plans aligning to achieve a target of approximately 25% market share by 2025, the company is poised for substantial gains. Micron’s innovative HBM3E technology offers advantages over competitors, with lower power consumption (~30%) driving increased customer engagement.
Rakesh also highlighted the firm pricing commitments secured by Micron for fiscal 2024 and early 2025, although potential supply constraints could further boost revenues.
Regarding Micron’s CHIPS Act funding negotiations to balance growth between the US and Asia, Rakesh indicated ongoing discussions to optimize the company’s strategic positioning.
Rakesh reaffirmed his revenue and EPS projections for the May quarter and fiscal years 2024, 2025, and 2026, underscoring Micron’s sustained momentum in the market.
In addition to a strong presence at Nvidia Corp, Micron is expected to benefit from the increasing adoption of AI accelerators by companies like Advanced Micro Devices, Inc, Intel Corp, and custom solution providers like TPU, MTIA, Athena, Trainium, and Inferentia.
Capacity expansion remains a key focus for Micron’s growth strategy, with plans to expand production significantly in 2024. While Micron ramps up production, competitors such as SK and Samsung are also boosting their capabilities, creating a dynamic market landscape.
Price Action: MU shares rose by 1.85% to $119.30 as of the latest check on Tuesday.
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