Semiconductor shares rallied in morning trading.
Micron rose 5%; Arm Holdings rose 4.5%; Nvidia, AMD rose about 3%; Marvell, Broadcom rose over 1%.
Baird analyst Tristan Gerra upgrading Micron Technology’s stock. He admitted the call is “a bit late” but noted that Micron shares have pulled back recently — they’re down just over 10% from their record-high close in early April.
“We see meaningful upside opportunities ahead for Micron notably given the stock’s recent pullback, in discrepancy with incrementally positive trends unfolding in DRAM per our recent channel checks,” he wrote, referring to dynamic random-access memory.
That creates the backdrop for a “somewhat unprecedented outlook for memory over the next 12-18 months,” Gerra added, lifting his rating on Micron shares to outperform from neutral and upping his price target to $150 from $115.
In Gerra’s view, DRAM pricing is stronger than the channel expects. There are also ways for Micron to capitalize on strong pricing trends on its own, such as by seeing customers ramp inventories of DDR5 memory offerings.