Please ensure Javascript is enabled for purposes of website accessibility

Why Micron Technology Stock Jumped on Tuesday

By Daniel Sparks - Updated Jan 19, 2021 at 3:22PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

One analyst has a few good reasons to buy Micron shares.

What happened

Shares of Micron Technology (MU 1.88%) jumped on Tuesday, rising nearly 6% as of 3 p.m. EST.

The tech stock's gain followed a note from Mizuho analyst Vijay Rakesh, who reiterated a buy rating and a $92 12-month price target for the semiconductor stock. 

A chart showing a stock price rising.

Image source: Getty Images.

So what

With the Trump administration recently adding Chinese smartphone-marker Xiaomi to a U.S. military blacklist, there have been concerns from some investors about how this could impact Micron, since Xiaomi is a customer of the semiconductor company. But Rakesh told investors that the blacklist isn't having a significant negative impact on Micron since the list is only related to products with military applications.

Moreover, Rakesh said a recent conversation with Micron's CFO convinced him Micron's DRAM (dynamic random access memory) is "already turning a corner" thanks to sequential pricing improvements.

Now what

Rakesh believes Micron is well positioned for further improvement in its DRAM business thanks to capital expenditure spending discipline and increased handset-server demand.

The analyst's comments confirm sentiment from Micron CEO Sanjay Mehrotra in the company's fiscal first-quarter earnings call on Jan. 7.

"We are excited about the strengthening DRAM industry fundamentals," Mehrotra said. "For the first time in our history, Micron is simultaneously leading on DRAM and NAND technologies, and we are in an excellent position to benefit from accelerating digital transformation of the global economy fueled by AI, 5G, cloud, and the intelligent edge."

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Micron Technology, Inc. Stock Quote
Micron Technology, Inc.
MU
$67.87 (1.88%) $1.25

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
322%
 
S&P 500 Returns
116%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/25/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.