Micron expects to strengthen AI demand, while other markets weaken

Micron Technology is on the verge of signaling renewed confidence in the robust demand for AI equipment in an upcoming market report. At the same time, the company remains confronted with weakening demand in the PC and smartphone sectors. Analysts predict strong growth for Micron's high-speed memory chips, which are essential for data processing in artificial intelligence. Positive comments on the AI market could revive the recently stagnating trade in AI chips, which had stalled following mixed reports from Broadcom and Nvidia. Micron recently faced disappointing expectations, with its shares declining by almost 40% since their peak in June. However, many see this as a potential buying opportunity. Experts like Christian Fromhertz from the Tribeca Trade Group emphasize that an optimistic report could drive Micron's stock above the current resistance line. In the options market, signs of optimism are evident. The ratio of put to call options on Micron is half of what it was a year ago. Particular attention is being paid to call options near the $100 mark, set to expire two days after the report. Analysts like Christopher Danely from Citigroup remain cautiously optimistic until the pricing trends for DRAM memory chips recover, which is expected within the next three to six months. Despite an overwhelming majority of buy recommendations among analysts, the short-term sentiment remains bleak. The long-term outlook, however, is more promising. Based on the average analyst price target, Micron's stock could rise by more than 50% over the next 12 months, the highest projected return among chip manufacturers. While AI is seen as a growth driver, Micron's other markets, such as PCs and smartphones, have not yet fully recovered from their setbacks. BNP Paribas Exane recently downgraded the stock and is the only firm tracked by Bloomberg that recommends selling. Daniel Morgan from Synovus Trust remains optimistic, seeing Micron's report as a potential catalyst for the entire AI sector. If Micron confirms the hopes awakened by AI, it could set positive impulses for the entire market.