Micron (NASDAQ:MU) has had a rollercoaster year, with its shares soaring by 80% in the early months of 2024 before losing a substantial portion of those gains mid-year. The pullback was driven by investor concerns over market saturation and peak valuations.
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However, MU’s stellar Q4 FY 2024 print at the end of September provided a much-needed boost to investor sentiment. The company posted quarterly revenue of $7.75 billion and an annual total of $25.1 billion, marking year-over-year growth of 93% and 62%, respectively.
All told, Micron stock is still up about 15% for the year. With Q1 FY 2025 earnings coming up on December 18th, top investor Victor Dergunov — who sits in the top 4% of TipRanks’ stock pros — believes another impressive showing could be on the horizon.
“Micron illustrated robust AI demand, is cheap, has a high probability to beat earnings estimates, and its stock seems considerably undervalued now,” says the 5-star investor. He further asserts that “Micron has a high likelihood to move much higher into year-end and 2025.”
Dergunov also points to Micron’s track record of exceeding its guidance, suggesting the company could announce revenues near the upper end of its forecast next week. Last quarter the company saw sales grow in every one of MU’s key markets (Compute and Networking shot up by 152% year-over-year alone), and Dergunov thinks this trend will continue apace.
“AI is present everywhere, in mobile phones, computers, and so on, and it needs more memory continuously to function properly,” the investor explains, underscoring the breadth of opportunity for Micron to supply memory solutions far beyond data centers.
Geopolitics could also provide Micron with some tailwinds, as the incoming Trump administration is likely to make it more difficult for foreign producers to export into the U.S. market.
“Micron is the dominant memory chipmaker in the U.S. and would likely benefit from potential tariffs as more customers could buy memory domestically instead of seeking cheaper alternatives outside the U.S,” notes Dergunov.
In light of these positive developments, Dergunov considers Micron a compelling value play. With Fiscal 2025 EPS projected at $9, its current valuation of 10-11 times EPS estimates is, in his view, “extremely attractive.”
“My one-year price target range remains $140-150 for Micron,” Dergunov sums up, assigning the stock a Strong Buy rating. (To watch Dergunov’s track record, click here)
Wall Street is just as gung-ho as the investor. With 23 Buy, 1 Hold, and 1 Sell recommendations, MU boasts a consensus Strong Buy rating. Its 12-month average price target of $149.81 implies ~47% gains over the next year. (See MU stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
