MU

One of my portfolio's favourites, Micron Technology (MU), refused to rise further immediately after posting another three months of solid growth. Its share price edged in the extended trading hours on the hot heels of the report, then slid by 2% during the first minutes of the regular session on Wednesday. For me, there's nothing surprising or discouraging in it, as Micron stock's sustainable rise from $120 in late August to $170 in mid-September, on hot market expectations before earnings release, was accomplished too quickly. This couldn't have gone without any damage to future performance. And there are always hope-buyers looking to take profits on facts. If so, making this halt at a campsite between $155 and $170 looks relevant, even though a tripling in Micron's cloud memory sales to $4.5 billion caused the whole group-wide revenue to spike by 46% YoY to reach $11.32 billion. Both numbers topped expectations.

Citing "tight" supply and "healthy" demand environment for DRAM (dynamic random access memory) chips, Micron is planning to hike its investments in the semiconductor sector of the US to $200 billion, also projecting its current quarter's midpoint profit at $3.75 per share on revenue of $12.5 billion, plus or minus $300 million. The expert pool of Wall Street was betting for Micron CEO's own forecast of $3.10 per share on $11.9 billion in total sales. All together it looks like a fascinating adventure for an almost inevitable hike to new and previously unknown heights. Pricing exceeded expectations for both DRAM and NAND (non-volatile flash memory to store data, used mostly in SSDs, smartphones, and USB drives). Hard disk drives (HDD) supply shortages are also good for NAND demand.

Personally, I believe in targets well above $200, and possibly even before Christmas. Only a very high bar of blowout numbers from other behemoths like Broadcom and Oracle prevents immediate price gains for Micron. Analysts at Wedbush hastily raised Micron's price target to $200 "on strong memory cycle outlook" beforehand, even one week ahead of the report. Barclays raised its target for Micron to $195 today. Wolfe Research and many other famous investment houses put it around $200 as well. KeyBanc just set its new price target at $215 several hours ago vs $160 before the release. The most reputable JPMorgan put its target at $220.00 from $185.00 while maintaining an Overweight rating. This is a sign of deep underestimation, and I join JPMorgan's estimates eagerly.