Why Micron Stock Just Popped
Micron (MU +4.65%) stock jumped 4.5% through 10:35 a.m. ET Friday — and you can thank private equity firm Lynx Equity for that.
In a note out last night, Lynx predicted a “breakout” for Micron stock, reiterating its opinion that $1,000 Micron stock could rise more than 30% to hit $1,325 within a year.
Image source: Micron.
Why Lynx loves Micron stock
Lynx didn’t always feel this way. As recently as June, Lynx was warning investors away from Micron, calling the stock “uninvestible” because of the massive swings in its stock price as momentum traders poured into — and out of — Micron on little more than hype and enthusiasm for the AI revolution.
Make no mistake. Lynx thought “the fundamentals remained strong” at Micron, and valued the stock at $1,300-plus. But with Micron trading north of $1,200 already in June, there just wasn’t a lot of room for upside — and too much room for downside if AI investors panicked. (Which they did, sparking a 45% sell-off in Micron stock through late July.
Today’s Change
(4.65%) $44.57
Current Price
$1,002.73
Key Data Points
Market Cap
Day’s Range
$969.00 – $1003.71
52wk Range
$125.66 – $1255.00
Volume
16.6M
Avg Vol
44.1M
Gross Margin
72.60%
Dividend Yield
0.06%
What’s next for Micron stock
But that was then, and this is now. And now, thanks to the sell-off, Micron stock is once again trading at levels that give investors a decent chance to earn a profit. (Indeed, up 52% off their lows, Micron’s already delivered some nice profits to investors who spotted the opportunity early.)
So are there more gains in store?
Lynx thinks so. Demand for high-bandwidth memory (HBM) is keeping DRAM and NAND spot prices elevated, as StreetInsider.com reports today. And with Micron stock still down nearly 20% from its highs, there’s a real chance the stock could “breakout” again, as Lynx predicts.
Priced at 21x earnings, but expecting triple-digit earnings growth over the next five years, Micron stock is priced to move.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool has a disclosure policy.
