Analysts issued commentary on Micron ahead of its third-quarter results; they expect Applied Materials to benefit from demand for equipment for making memory chips.
- Citi is expecting Micron to benefit from "elevated" gross margins, coupled with high memory prices this year.
- Koyfin has polled adjusted earnings per share of $19.72 on revenue of $34.5 billion for Micron’s third quarter.
- Morningstar analyst William Kerwin recently said the artificial intelligence-driven growth cycle for chip equipment is strengthening, benefiting Applied Materials.
Wall Street analysts on Wednesday revised their price targets for memory chipmakers Micron Technology (MU) and Applied Materials (AMAT) to reflect their current bull case amid the ongoing supply crunch from the artificial intelligence infrastructure buildout.
At the time of writing, both stocks were hovering just under 3% in premarket trading.
Street Takeaway On MU
Ahead of Micron’s fiscal third-quarter results, Citi and Deutsche Bank issued commentary on the company while maintaining their ‘Buy’ rating on the stock.
According to TheFly, Citi is expecting Micron to benefit from "elevated" gross margins, coupled with high memory prices this year. A recent report that chip giant Nvidia (NVDA) de-spec'd DRAM in its Vera Rubin platform was also among the reasons the firm increased its stock multiple on the company.
De-specing, or despecification, is a process where a company installs lower-capacity or slower chips in a final product as a cost-cutting measure and due to supply constraints.
The firm has raised its price target from $840 to $1,200, implying about 18% upside potential as of the stock’s last close on Tuesday.
Deutsche Bank also jumped on the bandwagon and revised its price target to $1,500 from $1,000, implying a 47% upside potential.
“We see continued momentum for MU fundamentals into this earnings report, with the industry supply-demand imbalance sustaining (if not worsening) into 2H26, 2027, and well into 2028,” Deutsche Bank analyst Melissa Weathers reportedly said in a note that CNBC saw.
The bank projects that memory-related tailwinds will boost revenue to $35.1 billion, exceeding Micron’s own estimate of $33.5 billion.
Koyfin has polled adjusted earnings per share of $19.72 on revenue of $34.5 billion for Micron. 39 out of 44 analysts rate the stock a ‘Buy’ or higher, 4 rate it a ‘Hold,’ and 1 ‘Sell.’
Street Takeaway On AMAT
Citi analyst Atif Malik raised the price target on chip equipment maker Applied Materials to $710 from $550, implying 25% upside potential, and is bullish on the company benefiting from demand for NAND memory equipment.
Malik believes the "widening gap" between needed DRAM and available supply will drive adoption of complementary solutions, TheFly reported.
In a recently published note, Morningstar analyst William Kerwin said the artificial intelligence-driven growth cycle for chip equipment is strengthening, benefitting Applied Materials, and that he now expects “even stronger growth through 2028.”
“We see Applied as very well-positioned for leading-edge logic, DRAM, and advanced packaging supply buildouts,” Kerwin said in a note to clients. “We expect Applied Materials to grow at a mid- to high-single-digit pace over the course of market cycles as it benefits from trends toward more complex chips in the long term, including gate-all-around transistors, advanced packaging, and artificial intelligence.”
What Do Retail Traders Think About MU And AMAT?
On Stocktwits, retail sentiment about the MU stock remained in ‘bearish’ territory, while it turned ‘neutral’ from ‘bullish’ on AMAT over the last 24 hours.
MU stock has risen more than eightfold, while AMAT has more than tripled in value over the last 12 months, outperforming the S&P 500 and the popular memory-chip-tracking ETF, Roundhill Memory ETF (DRAM).
For updates and corrections, email newsroom[at]stocktwits[dot]com.<
