(Bloomberg) — Micron Technology Inc.’s meeting. The more than $62 billion, AI-driven company will face a test of whether it has jumped too far, too soon.
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Shares of the chip maker are up roughly 65% this year. Much of that progress has come since Micron’s last quarterly report, with the stock hitting a record high this month. Investors will be looking for evidence of earnings growth and solid demand going forward in the next release due after Wednesday’s market close. The stock was up about 0.5% on Wednesday afternoon in New York.
Expectations are high. Wall Street expects Micron to report $6.7 billion in revenue in the quarter, an increase of nearly 80% from the same period a year ago. A shortfall could raise the risk of a selloff, with options contracts signaling the stock could move 12% in either direction in the trading session after earnings, according to data compiled by Bloomberg.
Micron has “captured the whole AI phenomenon,” said Jay Woods, chief global strategist at Freedom Capital Markets. “They’re really going to have to have a story that separates them from their peers.”
Where Micron stands out is in its memory capabilities, used in artificial intelligence applications, which Wall Street sees as bringing future revenue. Analysts’ estimates for quarterly adjusted earnings per share rose 9.5% in the past three months to 50 cents.
“We expect Micron to deliver momentum and growth as we enter one of the largest memory cycles in history,” wrote Hans Mosesmann of Rosenblatt Securities Inc. in a note on Tuesday. This growth will be driven by factors including demand for artificial intelligence applications and an increase in high-bandwidth memory chips that in turn reduces supply for traditional Dynamic Random Access Memory components, he added.
At $225, Mosesmann’s price target for Micron is the highest on Wall Street, according to data compiled by Bloomberg. The company overall has 37 buy ratings, two holds and one sell.
However, in case of disappointment, any potential weakness after earnings could be a good time to buy stocks, according to JPMorgan Chase & Co. analysts. led by Harlan Sur.
“We would use any short-term pullback in the stock to continue accumulating shares,” the analysts wrote in a June 24 note, adding that they see the memory segment’s current recovery taking the stock from current levels to $190 to $200 . a share.
Technical chart of the day
Shares of Nvidia Corp. jumped 6.8% on Tuesday, its best one-day gain since late May, snapping a three-day losing streak that wiped more than $400 billion in market value. Shares were lower in intraday trading on Wednesday.
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Earnings due on Wednesday
–With assistance from Subrat Patnaik and Stephen Kirkland.
(Updates stock movements throughout)
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