Micron Technology Stock Has 22% Upside, According to 1 Wall Street Analyst. Is the Stock a Buy Near Its All-Time High?

There's little doubt that the advent of artificial intelligence (AI) will have far-reaching implications in technology circles, though it's also clear the effect will be staggered. One company that's just beginning to see AI's impact on its results is Micron Technology (MU -0.33%), which provides memory and storage solutions that are integrated into other processors.

The stock is up 110% over the past year, but one Wall Street analyst believes there's still much more to come.

Central to the AI revolution

KeyBanc analyst John Vinh maintained an overweight (buy) rating on Micron stock while boosting his price target to $150. That represents a potential upside over the next 12 months or so for investors of roughly 22% compared to Monday's closing price. Channel checks suggest the company's HBM3E (High Bandwidth Memory 3E) chip is "meaningfully superior" to rival offerings in terms of power consumption and heat reduction.

The analyst goes further, suggesting that Micron has sufficient HBM capacity to sail past its forecast for "several hundred million" dollars of sales and could ship over $1 billion this year.

AI is fueling strong demand

It's hard to argue with the analysts' conclusion. When Micron reported the results of its fiscal 2024 second quarter (ended Feb. 29), its revenue grew 58% year over year to $5.8 billion. Management's forecast suggests the acceleration will continue as the company is guiding for third-quarter revenue to surge 76% to $6.6 billion. At the time, management noted that Micron's HBM3E solution had "30% lower power consumption" compared to its competitors, helping fuel robust demand.

The energy needed to power generative AI systems is significant, so the race is on to find more power-miserly and cost-effective solutions. Nvidia gave Micron's HBM3E its seal of approval and has integrated the chip into its H200 data center GPUs. Nvidia said that with Micron's chip, the H200 delivered "nearly double the capacity and 2.4x more bandwidth compared with its predecessor, the Nvidia A100."

Furthermore, at just 4 times forward sales, Micron stock is a buy, delivering plenty of AI-fueled upside for a bargain basement price.