Micron Technology (MU) stock is soaring Thursday after the memory chipmaker beat top- and bottom-line expectations for its fiscal fourth quarter and provided an outlook that is higher than Wall Street anticipates.
In the quarter ended August 29, Micron's revenue increased 93.3% year-over-year to $7.75 billion. Its earnings per share (EPS) came in at $1.18 compared with a loss of $1.07 in the year-ago period.
Micron's sizzling year-over-year revenue growth came "as robust artificial intelligence (AI) demand drove a strong ramp of our data center DRAM products and our industry-leading high bandwidth memory," said Micron CEO Sanjay Mehrotra in a statement. "Our NAND revenue record was led by data center SSD sales, which exceeded $1 billion in quarterly revenue for the first time."
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The results came in ahead of analysts' expectations. Wall Street was anticipating revenue of $7.66 billion and earnings of $1.11 per share, according to Yahoo Finance.
For its first quarter of the new fiscal year, Micron is expecting revenue of $8.7 billion, plus or minus $200 million, and earnings of $1.74 per share, plus or minus 8 cents, both of which are ahead of analysts' forecasts for revenue of $8.3 billion and earnings of $1.64 per share.
"We are entering fiscal 2025 with the best competitive positioning in Micron's history," Mehrotra said. "We forecast record revenue in fiscal Q1 and a substantial revenue record with significantly improved profitability in fiscal 2025."
Is Micron stock a buy, sell or hold?
Micron is one of the best stocks on Wall Street today, but shares have been outperforming the broader market for most of the year. And Wall Street thinks the chipmaker has more room to run.
According to S&P Global Market Intelligence, the average analyst target price for MU stock is $146.81, representing implied upside of more than 30% to current levels. Additionally, the consensus recommendation is a Strong Buy.
Financial services firm Needham is one of those with a Buy rating on the semiconductor stock, along with a $140 price target.
"We expect MU to benefit from the recovery in the memory cycle in calendar year 2024 after the worst supply-demand imbalance in thirteen years," says Needham analyst Quinn Bolton. "Long term, we view MU as a key beneficiary of strong data center demand – both AI and machine learning (ML) – automotive semi content, graphics, and industrial automation."
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