Micron (NASDAQ:MU) stock has had a rollercoaster journey this year. The memory giant surged throughout the first half of 2024, reaching an all-time high back in June but since then the shares have pulled back by almost 40%.
As the company prepares to report its fiscal fourth-quarter results tomorrow (Wednesday) after market close, concerns over a softening DRAM market have dampened expectations. However, Morgan Stanley analyst Joseph Moore suggests that this lowered outlook might actually play in the stock’s favor.
“Expectations are way down, and tactically, we think that if they can guide above a low buyside bar for November ($1.30-$1.40 in EPS vs. our $1.57), credibly argue that their HBM3e (specialty AI memory) ramp is tracking, and maintain their overall optimism, the stock could be oversold (already down 40% from its highs),” the 5-star analyst said.
Yet, before rushing to bullish conclusions, Moore offers some caution. While he praises the “very high quality” of Micron’s HBM3e memory, which could see deployment in NVIDIA’s H200 and Blackwell platforms as well as AMD’s upcoming MI325, he warns that an expected oversupply of HBM might not be enough to drive the bull case.
“Longer term,” Moore says, “the stock still seems too expensive for any kind of value thesis.”
Why the skepticism? Moore argues that outside of HBM, the broader DRAM market remains sluggish with “excess inventory everywhere.” Even with the recent selloff, he believes Micron stock still appears overpriced by traditional metrics. While he acknowledges that backward-looking measures “shouldn’t define the story,” they do set a clear baseline. “The only case for the stock to move higher would be a very strong environment that trumps prior peaks, and we see that as unlikely,” the analyst summed up.
Accordingly, Moore rates Micron shares as Equal-weight (i.e., Neutral) while his $100 price target factors in a 12-month upside of ~6%. (To watch Moore’s track record, click here)
However, Moore is in the minority. Apart from one bear, all 24 other analysts covering MU rate it a Buy, providing the stock with a Strong Buy consensus rating. The average price target is a bullish one; at $151.54, the figure suggests shares will climb ~61% higher in the year ahead. (See Micron stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
