Last week, J.P. Morgan analyst Harlan Sur attended Micron’s (MU) inaugural Insight event that focused on Artificial Intelligence (AI) across verticals with several partner companies providing keynote presentations on their current developments in AI and how they are advancing AI, with several presentations including the roles of memory and storage in helping to drive such advancements.
Micron Insight event was launched in 2006 as a medium to help entrepreneurs revolutionize industries through the application of AI in various sectors. Startup companies aligned with the strategic interests of Micron through this medium could receive investments through Micron Ventures. In conjunction with the event, Micron announced it will invest up to $100 million in venture funding targeted at technology startups focused on AI, with 20% aimed at startups led by women and other underrepresented groups.
Sur noted, “We conclude that AI is truly at its early stages with a long runway for growth and we expect the demand for memory and storage to accelerate as AI workloads proliferate. Micron itself is benefitting from the use of AI in its own factories which is helping improve yield ramps and increasing factory output […] Overall, we expect Micron to benefit from a long runway of AI growth (and from solid cloud data center demand in general) with its complete portfolio of DRAM (including graphics, networking and HBM), NAND (including SSDs) and 3D XPoint and increasing competence in providing systems-level solutions.”
“Memory (high-speed DRAM) and storage (low latency, high density SSDs) are instrumental in AI timeto-results. Broader data center already accounts for roughly a third of Micron’s revenues and with the growth of data center, including AI, we see the portion continuing to rise,” the analyst added.
Net net, Sur rates MU shares an Overweight, with a price target of $75, which implies an upside of 77% from current levels. (To watch Sur’s track record, click here)
Wall Street agrees with Graham that this chip giant is one to watch, as TipRanks analytics exhibit MU as a Strong Buy. Out of 22 analysts polled in the last 3 months, 17 are bullish on Micron stock while 5 remain sidelined. With a return potential of 57%, the stock’s consensus target price stands at $66.38. (See MU’s price targets and analyst ratings on TipRanks)