Shares of Micron Technology (MU 2.92%) have been on a tear since the company's recent quarterly update. The stock hit another new high Tuesday morning after Mizuho Securities raised its price target on Micron stock from $124 to $130. This represents an upside of roughly 8% over the next 12 months or so from the current share price of $119.
The target boost follows positive commentary from Micron about near-term demand trends for its memory products that could be the start of a significant growth curve.
Micron is swinging back to growth
Micron is just starting to pull out of a sales slump. After seeing revenue decline by double-digit percentages last year, it has reported two consecutive quarters of double-digit year-over-year increases. In the most recent quarter, revenue grew 57% year over year.
The reason Mizuho analysts still see near-term upside for the stock is the opportunity to meet growing demand for high-bandwidth memory (HBM) in the artificial intelligence (AI) market.
Earlier in March, Nvidia unveiled its next-generation Blackwell graphics processing unit (GPU) platform for AI systems. Micron says Nvidia's new GPU architecture will drive a 33% increase in HBM content per GPU. This is a catalyst for Micron.
Importantly, Mizuho forecasts the HBM market to grow at an annualized rate of 65% from 2023 to 2026. With the rest of Micron's business also ramping up, management expects fiscal 2025 to be a record year for the company.
Is Micron stock a buy?
The stock is currently trading at 16 times next year's earnings estimates, which means its valuation is bordering on the expensive side based on Micron's trading history. But more new highs could be justified if Micron can deliver more sustainable revenue growth due to meet growing AI demand.
