Source: Lynxbroker
Micron is experiencing an unprecedented upswing and is surprising even the optimists. The memory pioneer could be one of the biggest AI winners.
A few days ago, the company presented its figures for the third quarter; Micron's financial year ends in August.
At USD 1.91 per share, earnings were well above expectations of USD 1.60. With sales of USD 9.30 billion, the company also exceeded analysts' estimates of USD 8.84 billion.
For the year as a whole, this corresponds to a 37% jump in sales and a more than tripling of profits. Free cash flow increased from USD 425 million to USD 1.95 billion.
Even die-hard Micron bulls probably did not expect such good business figures.
Outlook and valuation
DRAM sales reached an all-time high, NAND is on the verge and sales with HBM increased by 50% from one quarter to the next to around USD 1.5 billion.
This is likely to continue in a similar vein. Micron is forecasting earnings of USD 2.35 - 2.65 per share for the final quarter, far higher than the previous consensus estimate of USD 2.02 per share.
Accordingly, Micron should achieve earnings of USD 7.76 per share in the current financial year.
In the coming financial year, which begins in September, record earnings of over USD 12 per share are expected.
If the forecasts are correct, a simple scenario can be derived from this: Either the P/E falls to 10 or the share price rises. Major setbacks should therefore prove to be an opportunity.
If the share price falls below USD 114, for example, there could be another setback towards USD 97 - 102.
If, on the other hand, it manages to break above USD 130, a rally towards USD 145 - 150 or the all-time high would be conceivable
Chart from 30.06.2025, price: USD 124.76 - abbreviation: MU | Source: TWS
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