MU Stock Is Down 10% — But BofA Just Raised Its Price Target By 58%

• BofA’s latest price target hike on Micron comes after the firm updated its long-term semiconductor industry forecasts.
• The firm said its revised estimates reflect a larger addressable market for chipmakers as demand continues to accelerate across AI, cloud computing and data center infrastructure.
• BofA now expects the global semiconductor industry to generate a total addressable market of $2.7 trillion by 2030, up from its previous forecast of $2.3 trillion.

Shares of Micron Technology Inc. (MU) were down more than 10% in Tuesday morning’s trade ahead of its third-quarter (Q3) earnings due Wednesday, amid a broader selloff in AI and chip stocks.

However, analysts at BofA are unperturbed by the selloff. According to TheFly, the firm hiked its price target on Micron by 58% to $1,500 from $950, while keeping a ‘Buy’ rating.

Why Is BofA Bullish On MU?

BofA raised its price target on Micron for the second time in over a month. The firm had raised the target last month to $950 from $500, and since then, Micron shares have soared past the target after a 36% surge.

BofA’s latest price target hike on Micron comes after the firm updated its long-term semiconductor industry forecasts. BofA said its revised estimates reflect a larger addressable market for chipmakers as demand continues to accelerate across AI, cloud computing and data center infrastructure.

The brokerage now expects the global semiconductor industry to generate a total addressable market of $2.7 trillion by 2030, up from its previous forecast of $2.3 trillion.

The increase is driven primarily by stronger growth expectations for memory and data center chips, two areas where Micron is positioned to benefit from rising AI-related spending.

BofA also sees additional support coming from a recovery in automotive and industrial markets, which have remained relatively weak in recent years.

Taken together, the firm believes these trends create a significantly larger growth opportunity for the semiconductor sector and underpin its more bullish outlook on Micron shares.

MU’s Q3 Earnings Coming Up

Micron’s Q3 earnings are scheduled to be reported after the bell on Wednesday.

According to Fiscal.ai data, Micron is expected to report earnings per share (EPS) of $20.28 on revenue of $35.3 billion.

During the same period a year ago, Micron reported an EPS of $1.91 on revenue of $9.3 billion.

MU Announces Strategic Partnership With Anthropic

Micron and Anthropic on Monday announced a strategic partnership focused on developing next-generation AI infrastructure, combining collaboration on memory and storage architecture with a long-term supply agreement.

The companies said they will work together to optimize how memory and storage systems support AI training and inference workloads, with the goal of improving performance, energy efficiency and overall AI economics.

The agreement also includes Micron's adoption of Anthropic's Claude models across its operations and a strategic investment by Micron in Anthropic's Series H funding round.

The companies said the partnership aligns Anthropic's growing compute needs with Micron's memory and storage technologies as demand for advanced AI systems continues to increase.

What Do Retail Traders Think Of MU?

Retail sentiment on Stocktwits around Micron Technology trended in the ‘bullish’ territory at the time of writing.

MU stock is up 283% year-to-date and 796% over the past 12 months. The S&P 500 ETF Trust (SPY) is up 23% over the past 12 months, while the Invesco QQQ Trust (QQQ) is up 35%.

The iShares Semiconductor ETF (SOXX) is up 170% during this period, while the State Street Technology Select Sector SPDR ETF (XLK) is up 53%.

Also See: Melius Research's Ben Reitzes Slams Satya Nadella Pivoting Microsoft To Being Model-Agnostic — 'What's He Talking About?'

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