Micron (MU) Stock Trades Up, Here Is Why

What Happened?

Shares of memory chips maker Micron (NYSE:MU) jumped 4.6% in the morning session after analysts raised their price targets on the stock, pointing to strong demand for its memory chips used in artificial intelligence (AI) applications. 

UBS increased its price target on Micron to $225 from $195, maintaining a Buy rating due to stronger projections for high-bandwidth memory (HBM) sales. Goldman Sachs also adjusted its price target upward to $180 from $145. This optimism was supported by a broader surge in the semiconductor industry, fueled by the rapid adoption of AI. Adding to the positive developments, Micron launched a new, faster, and more power-efficient memory module designed for AI-ready laptops and workstations, which the company expected would boost future revenues.

After the initial pop the shares cooled down to $194.91, up 5% from previous close.

Is now the time to buy Micron? Access our full analysis report here.

What Is The Market Telling Us

Micron’s shares are very volatile and have had 27 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was about 23 hours ago when the stock dropped 2.7% on the news that reports revealed tech giant Oracle is generating lower-than-expected margins in its cloud business and losing money on Nvidia chip rentals. 

The news caused Oracle's shares to tumble over 5% and sparked a wider tech sell-off, pulling the S&P 500 and Nasdaq down. Investors are growing concerned about the actual strength and profitability of artificial intelligence demand, which has been a primary driver of the market's recent record-breaking run. Oracle's struggles suggest that the massive capital investments required for AI, such as acquiring expensive chips, may not be translating into immediate or guaranteed profits. This has led to broader anxiety that the AI boom's financial returns might be less certain than previously anticipated, causing traders to pull back from the sector. 

Compounding these worries was the ongoing U.S. government shutdown, in its second week, with no clear resolution in sight from Washington. This political uncertainty drove investors away from riskier assets and towards safe havens, a trend highlighted by gold hitting a record $4,000 per ounce for the first time.

Micron is up 123% since the beginning of the year, and at $194.91 per share, has set a new 52-week high. Investors who bought $1,000 worth of Micron’s shares 5 years ago would now be looking at an investment worth $3,907.

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