DA Davidson Reiterates Buy Rating on Micron
DA Davidson analyst Gil Luria reiterated a Buy rating and $1,000.00 price target on Micron Technology (NASDAQ: MU).
“Following up on our recent initiation after investor conversations, we have increased conviction around our BUY rating and $1,000 target.
We are blissfully unencumbered by the memory industry’s past.
While investors recognize how dynamics have changed in the AI era, many are still anchored to the view of Micron as a flat, highly cyclical business, that as such can trade at less than 10x.
Investors do recognize the higher value-add at the high end HBM, the DRAM oligopoly and the longer-term contracts.
However, we believe investors are still underestimating the new math of memory in the AI age. The bigger the models, the more memory they require.
That creates more KV cache needs, which requires even more memory. The same models with longer context lengths will provide far better intelligence, which requires even more memory.
The longer context makes the models better, which will make bigger models possible and the virtuous cycle continues.”
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