Micron: A Player in the Chip Sector with Potential

Micron Technology shares are rising at the start of the week after a leading Wall Street analyst presented optimistic prospects for the memory chip market in a new analysis ahead of the company's quarterly report. Although Micron has so far lagged behind the Nasdaq index—which has improved by 32.7% this year while Micron only posted growth of 24%—investors are hoping for a turnaround. The reason is Micron's new entry into the high-speed memory chip (HBM) market, which optimizes the performance and energy consumption of AI systems. These advanced chips, including the latest HBM3E iteration, are already integrated into Nvidia's H200 processors as well as the new Blackwell systems. This positions Micron among the few global companies competitive in this dynamic market, a position strengthened by the multi-billion dollar support from the US government via the CHIPS and Science Act. US Commerce Secretary Gina Raimondo emphasized the importance of advanced memory chips for modern technologies and highlighted the strategic return of the USA to domestic production. Weaknesses in the DRAM price segment, also due to declining consumer demand, could, however, burden the upcoming quarterly report, expected on Wednesday after the market closes. A profit of about $1.72 per share is forecasted, with a revenue increase of 85% to $8.72 billion. Micron itself forecasts a revenue increase of a similar magnitude and improvements in profit margins by 3 percentage points thanks to the higher proportion of HBM sales. The market for HBM chips, also served by SK Hynix and Samsung Electronics, is expected to rise to around $25 billion by 2025, according to the company. Citigroup analyst Christopher Danely remains optimistic, maintaining his 'Buy' rating and the price target of $150, although he foresees slight deviations from consensus expectations due to weaknesses in the traditional DRAM business.