Micron’s Earnings Just Gave One Analyst a Will Smith Slap in the Face

Back in late September, Karl Ackerman from BNP Paribas decided to throw a wrench in Micron's gears, right after the stock had tanked 43% since June. But fast forward to today, and Micron (MU) just handed Karl a big, steaming “I told you so,” with fourth-quarter earnings that shattered expectations. 

Micron’s stock is up 17%, and it’s not showing any signs of slowing down. Suddenly, all those analysts who were nervously whispering about AI tech being a scam are tripping over themselves to jack up their price targets, trying to save face.

As you would expect, Micron’s performance in the AI space has been a key factor behind its latest earnings beat. The company reported "several hundred million dollars" in HBM (high-bandwidth memory) chip sales for fiscal year 2024. And they’re not stopping there—oh no. Micron’s projecting “multiple billions” in HBM chip revenue for 2025. (I know, talking chips sounds as exciting as watching paint dry, but these bad boys are critical for AI systems. Trust me, it’s important.)

To put this into context, these chips are used in Nvidia's H200 processors and newly developed Blackwell systems, making Micron one of only a few companies able to compete in this fast-growing market. With AI demand on the rise, Micron’s chips are positioned to be a big part of that story. While smartphone and PC chip sales have been as slow as Christmas, Micron’s success in the AI market is offsetting those weaker areas.The company expects the HBM chip market to balloon from $4 billion in 2023 to $25 billion by 2025. If you’re wondering why analysts are suddenly so bullish, there’s your answer.

Speaking of analysts, they’ve been doing Olympic-level mental gymnastics since the earnings call. BofA’s Vivek Arya wasted no time, bumping his price target by $15 to $125, saying Micron’s got data center demand locked down and AI growth is only just heating up. 

Even Karl Ackerman (yes, that Ackerman) had to swallow his pride and raise his target to $135. I bet that crow didn’t taste too great. Over at CFRA, Angelo Zino stuck with his $140 target, pointing to Micron’s cozy relationship with Nvidia’s Blackwell and Rubin AI chips as a big driver for future growth.

CFRA’s Angelo Zino held his price target at $140, noting Micron’s close partnership with Nvidia’s Blackwell and Rubin AI chips, which will drive future growth. Morgan Stanley's Joseph Moore and Goldman Sachs' Toshiya Hari followed suit, raising their targets to $114 and $145, respectively.

While most analysts are falling for the peer pressure, there are a few who remain cautious. Mizuho’s Vijay Rakesh trimmed his target to $135 from $145, and Susquehanna shaved theirs down from $175 to $165, citing concerns about broader market trends. (I guess some people just love to worry.)

Micron’s CEO Sanjay Mehrotra is confident about the company’s future. On the latest earnings call, he came out swinging, saying Micron’s rolling into fiscal 2025 in its “strongest competitive position” ever. Micron is predicting a cool $8.7 billion in revenue for the current quarter, with profit margins set to beef up by 300 basis points. Why? All thanks to their HBM chips, which are selling like overpriced concert tickets (and yeah, they’re not cheap).

In addition, Micron plans to significantly increase capital expenditures, with a 70% boost from 2024, bringing their total capex to around $13.5 billion in fiscal 2025. This is a clear sign that the company is preparing to capitalize on the growing demand for AI chips and expand its capacity to meet that demand.

So, if you’ve got your eye on Micron, don’t blink. This stock is primed for big things in 2025. And as for Karl? Well, hey, everyone swings and misses sometimes.

The alert we dropped yesterday is already up 21%, and with a Cost to Borrow pushing 600%, this stock is about to crank it up another notch. If you’re thinking you missed your shot, think again—there’s still plenty of juice left in the orange. Don’t be the person “crying in da club” this time—get in on the second leg before it blows up even more.

Stock.News does not have positions in companies mentioned.