SanDisk (SNDK) stocks were buoyant and bullish as storage stocks rebounded early in trading today.
Micron Technology stock was gaining early Tuesday after a wobble the previous day. The memory-chip maker can go a lot further on the back of rising prices for its hardware, according to KeyBanc analyst John Vinh.
The shares were up 4.1% at $975.31 in Tuesday’s early trading. The stock dropped 4.3% on Monday amid a broad chip-sector selloff.
Memory-chip stocks have been notably volatile after racking up huge gains on the surge of spending caused by the artificial-intelligence boom. Markets are trying to gauge how long memory prices can keep rising.
KeyBanc’s Vinh thinks the answer is at least for another 18 months. He raised his target price on Micron to $1,750 from $1,600 in a research note Monday, following a trip to Asia to check on supply chains. That would indicate an 87% increase from Monday’s closing price of $937.
He bases his target on a price-to-earnings ratio of nine times his forecast for Micron’s earnings in fiscal 2027.
“Memory shortages remain persistent…Supply chain commentary continues to point to a tight memory environment through 2027,” Vinh wrote.
More specifically, KeyBanc forecasts dynamic random-access memory (DRAM) prices will rise 15%-20% in the third quarter of this year from the previous quarter, and a further 15% in the fourth quarter. NAND flash memory prices are set to rise 30%-40% in the third quarter and a further 15% in the fourth quarter.
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- ISAM·07-15 04:33This is extremely bullish from Keybanc considering the competition from others and already elevated valuation. I believe MU has a long way to go but need to wobble around current prices for a while.1Report