Memory-chip leader Micron Technology is the IBD Stock Of The Day as the company benefits from the buildout of data centers for artificial intelligence applications.
On Friday, Micron stock broke out of a cup-with-handle base with a buy point of 128.60, according to IBD MarketSurge charts. It ended the regular session Friday up 5.8% to 131.37. The 5% buy zone runs to 135.03, based on IBD trading principles.
On the stock market today, Micron stock initially pulled back slightly but remained above the buy point. Later, it reversed higher. Micron stock ended the regular session up a fraction to 131.46.
The Boise, Idaho-based company is seeing robust sales of high-bandwidth memory products for artificial intelligence data centers.
In a note to clients Monday, Rosenblatt Securities analyst Kevin Cassidy reiterated his buy rating on Micron stock with a price target of 200.
"We remain constructive on semiconductor companies with high AI/data center exposure," Cassidy said.
Micron is benefiting from adoption of custom AI chips, also called XPUs, from the likes of Broadcom, he said. XPU adoption is driving increased demand for high-bandwidth memory, he said.
Fiscal Fourth-Quarter Earnings On Tap
Up next for Micron is the company's fiscal fourth-quarter results on Sept. 23. Analysts polled by FactSet expect Micron to earn an adjusted $2.77 a share, up 135% from the same quarter last year. Micron's sales are seen advancing 43% to $11.11 billion.
For its fiscal first quarter, Wall Street predicts Micron earnings of $2.98 a share, up 66%, on sales of $11.73 billion, up 35%.
In late August, Baird analyst Tristan Gerra called Micron stock one of his "best ideas."
"Micron is a business transformation story," Gerra said in a note to clients. The company "is now well ahead of Samsung in critical segments" of the memory-chip market.
Those segments include LPDDR5, or fifth-generation low-power, double data rate memory, and SOCAMM, or system-on-chip advanced memory module. Its memory products in those areas are being used with Nvidia's GB200 AI processor.
Micron Stock Is On Two IBD Lists
Micron stock has a best-possible IBD Composite Rating of 99, according to IBD Stock Checkup.
Further, its industry group, Computer-Data Storage, ranks No. 11 out of 197 groups that IBD tracks.
Its Accumulation/Distribution Rating of B- indicates modest institutional buying of Micron shares.
Micron stock is on two IBD lists: Leaderboard and Tech Leaders.
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