Micron (MU) Could See Robust Growth as DRAM Demand Firms

Micron Technology (Nasdaq: MU) shares are pressured Monday as investors evaluate news that Samsung is planning to construct a $15 billion semiconductor plant, though Barron's was positive on the stock this past weekend.

Barron's noted recent data from Gartner, which said that dynamic random access memory, or DRAM, should generate 26.3 percent revenue growth this year to $44.1 billion. However, Gartner also sees a 25.5 percent plunge in DRAM revenue during 2016.

Positive for DRAM include the consolidation of key producers from 20 to three since the 1990s and many businesses are going through a refresh cycle on corporate computing devices. There's also the potential for firm growth in the smartphone and tablet markets.

Big data applications, which are generally memory-heavy undertakings, will also be a key driver for Micron.

Micron boasts a 25 percent share of the DRAM market and 10 to 15 percent share of the NAND market. Samsung is the current DRAM leader.

Free cash flow for Micron could hit $3.4 billion in FY14, from $2.6 billion last year. Analysts also see the stock reaching $50 within the next year, amounting to 12 times forward earnings.

Shares of Micron are down nearly 4 percent.

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