Micron Stock Review (MU): What You Need To Know

By Amit Chowdhry ● September 15, 2020
  • Looking for a Micron Technology stock review (NASDAQ: MU)? Here is some information to help you decide whether to add Micron to your portfolio.

The stock price of Micron Technology, Inc. (NASDAQ: MU) saw some traction this week, which was triggered by Goldman Sachs announcing that it sees a 17% upside in the stock price of the computer storage and memory company. After Goldman Sachs made the announcement on Monday, September 14, 2020, the stock price closed at $49.03 —up from $46.09 in the previous close (+6.38%). Specifically, Goldman Sachs managing director Toshiya Hari upgraded Micron’s shares to buy from neutral and assigned the stock price a $58 price target.

Even though the prices of DRAM and NAND memory has been taking a hit, Goldman Sachs is expecting the drop in prices to be “short-lived.” And Goldman Sachs also said that Micron is “well-positioned competitively” for profiting as the prices improve in the long-term.

It’s also worth mentioning that Goldman is warning investors to be aware of a wide range of potential outcomes based on how the prices of memory move. In a bullish case, Micron shares could potentially triple in value. But in a bearish case where cyclical memory declines more, there could be a 49% downside in the stock.

Goldman Sachs’ price target increase greatly differs from Citi. On August 27, Citi dropped Micron’s estimates due to the latest Huawei ban and then it reiterated a sell rating.

However, Needham analyst Rajvindra Gill reiterated a Buy rating on Micron last month with a price target of $70. And Gill is expecting Micron to post earnings per share (EPS) of $0.72 for the third quarter of 2020.

When asked about Micron during a lightning round, CNBC’s Mad Money host Jim Cramer said this about the company: “This is the only semiconductor company that everybody hates. … I don’t know what to say. I would not sell that stock down here, that would be ridiculous, but I do like Nvidia and AMD better. Don’t forget Broadcom and Marvell.”

NVIDIA Partnering With Micron

A couple of weeks ago, Nvidia had announced it is partnering with Micron and Samsung for new gaming chips. The new GeForce RTX 3090, 3080 and 3070 chips will use memory technology that Micron has been working on since 2006 called GDDR6X in order to double the amount of data that can be integrated into Nvidia’s chip for processing.

“Unlike traditional memory, GDDR6X has unparalleled data rates that can keep pace with gaming innovation and data-hungry applications,” said Tom Eby, senior vice president and general manager of the compute and networking business unit at Micron at the time of the announcement.

Micron Technology Stock Review (NASDAQ: MU)

While reviewing Micron’s stock, I checked out an analyst consensus report and I was surprised by the results. In the consensus: 6 analysts are saying strong buy; 20 say buy; 10 say neutral; 0 say sell; and 1 says strong sell. This is one of the few stocks I have seen where a much higher proportion of analysts are recommending a buy.

I also checked out Micron’s stock performance over certain periods of time:

1-day: -0.02% as of 11:43 AM ET today

5-day: +5.44%

1-month: +7.5%

3-month: +0.7%

6-month: +14.9%

YTD: -10.16%

1-Year: -2.3%

5-Year: +216.1%

Since 1984: +1,830.64%

Based on all of the information above, I like what I am seeing when it comes to Micron in the long-term, but not in the short-term. What I plan to do in my portfolio is to buy more Micron stock and hold it for an extended period of time. Specifically, I plan to keep increasing my position at a wide variety of price points in order to keep improving on the dollar-cost averaging.

Disclosure: I own a few MU shares. I wrote this article myself and I do not have any business relationship with any company whose stock I write about. I am not a financial advisor and all articles are my opinion. You should do your own due diligence and consider talking to a financial professional before investing.