TLDR
- Micron stock dropped 7% Friday, SK Hynix ADRs fell 8.8%, despite both being up for the week
- Micron is still up ~6% for the week after gaining in three of the last five sessions
- Bank of America reiterated a Buy rating with a $1,550 price target, seeing ~65% upside
- Micron posted record Q3 revenue of $41.46 billion, up 346% year-over-year
- Microsoft and Amazon earnings next week could act as catalysts for memory stocks
Micron (MU) stock dropped 7% on Friday, giving back some of Thursday’s 3.2% gain. Despite the Friday pullback, MU is still up around 6% for the week.
SK Hynix’s American depositary receipts fell 8.8% on the same day, after a 2.6% gain in the prior session.
The Friday dip came after a rough month for both memory names. Micron is down 12.8% over the past 30 days, while SK Hynix’s Seoul-listed stock has shed nearly a third of its value over the same period.
Concerns about chip pricing sustainability have weighed on the sector. Those worries haven’t fully gone away, even as both stocks bounced back this week.
One bright spot came from Alphabet’s earnings, which showed continued growth in data center spending — good news for memory chipmakers like Micron. Alphabet stock had its worst single-day drop ever in terms of market cap lost, but the data center spending outlook helped lift memory names heading into the end of the week.
BofA Stands Firm on Micron
Bank of America reiterated its Buy rating on MU this week with a price target of $1,550, implying roughly 65% upside from current levels.
The bank pushed back on fears that China’s Kimi K3 AI model would reduce AI infrastructure spending. BofA argued the opposite — that more efficient AI models could drive higher demand for high-bandwidth memory (HBM), DDR5, and NAND storage.
BofA also believes open-weight AI could expand Micron’s addressable market by pulling in thousands of enterprises that will run AI models on their own hardware, rather than relying on a few large hyperscalers.
Micron currently trades at around 21.5 times trailing earnings and 13.1 times forward earnings — below the broader semiconductor average. Other firms including KeyBanc, TD Cowen, Bernstein, and Citigroup all carry bullish ratings on the stock. The consensus price target sits around $1,495, suggesting around 60% upside.
Record Numbers Back the Bull Case
Micron’s most recent quarterly results give the bulls plenty to work with. Fiscal Q3 revenue hit a record $41.46 billion, up 346% year-over-year. Adjusted EPS came in at $25.11, up from $1.91 the same quarter a year earlier.
Free cash flow reached a record $18.3 billion. Operating cash flow hit $25.39 billion.
Management guided for approximately $50 billion in Q4 revenue and non-GAAP EPS of around $31.
Micron has also locked in long-term supply agreements with automotive customers including Ford, General Motors, Qualcomm, Denso, Harman, and Visteon.
Next week brings earnings from Microsoft on July 29 and Amazon on July 30. If either signals increased data center spending — as Alphabet did — memory stocks could see another lift.
Micron carries a “Strong Buy” consensus rating on Wall Street.
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