What happened

Stocks were up broadly in Tuesday trading after Monday's big sell-off -- but few stocks had quite as big a day as Micron Technology (NASDAQ:MU) did.

On Tuesday, two separate analysts -- KeyBanc and Needham & Co. -- both upgraded Micron stock to various flavors of "buy," with Needham in particular predicting that Micron stock could nearly double in value over the coming year.

Thumb drive in a laptop

Analysts and investors gave memory maker Micron stock a big "thumbs up" Tuesday. Image source: Getty Images.

So what

Those are the analysts' opinions, and they're entitled to them, of course. But is there anything in particular behind those opinions, to justify taking such an optimistic view of Micron stock? Turns out there is, and it comes straight from the mouth of Micron management.

On Monday, Micron preannounced its fiscal second-quarter 2018 earnings results, telling investors that it expects  to earn anywhere from $2.70 to $2.75 per diluted share this year on $7.2 billion to $7.35 billion in sales -- numbers significantly higher than previous guidance, and putting Micron on track (as Needham pointed out) to earn as much as $10 a share this year.

Now what

If Micron succeeds in earning $10 -- and analysts aren't ruling it out, with the consensus being $9.79 per share right now -- it would value Micron stock at less than 4.5 times current-year earnings. For a stock that most analysts agree should be capable of growing earnings at about 10% annually over the next five years, that looks like a big, fat bargain.

That's why analysts upgraded Micron today -- and that's why investors are buying it.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.