Micron Technology stock was set to keep rising Tuesday after hitting a record high the previous day. Wall Street analysts are adjusting their price targets and see further gains ahead.
Shares of the memory-chip maker were up 2.4% at $1,113.96 in premarket trading. The stock closed up 11% at $1,087.99 on Monday, a record close.
Micron has risen more than 800% in the past 12 months as investors rethink the notably low forward price-to-earnings ratio normally assigned to the stock, due to the frequent boom-and-bust cycles of the memory-chip industry. Soaring demand for memory in artificial-intelligence hardware and the prospect of long-term supply agreements is set to support a longer earnings boom.
Barron's has argued that Micron and several of its chip peers remain undervalued considering the need for their hardware to power artificial-intelligence servers.
Wall Street looks to be of the same opinion. Analysts at TD Cowen and Cantor Fitzgerald recently raised their target prices on the stock to $1,500, implying a further gain of nearly 40% from current levels.
Melius Research analyst Ben Reitzes has a comparatively conservative price target of $1,100 but is positive on the possibility of future gains, noting Micron could generate as much as $150 in earnings per share in 2027.
"The 80% gross margins we're seeing right now should be around for a while, longer than people think. And then we're going to get some big buybacks coming in 2027 which could take the stock to new heights," Reitzes said in a video presentation on Monday.
Micron will report earnings after the market close on June 24.
