Bank of America Names Top Stock Pick in Memory Sector

Investing.com -- Bank of America has highlighted Micron Technology as its top stock pick, maintaining a buy rating with a price objective of $1,550, significantly above the current trading price of $877.55.

The firm's confidence stems from recent investor meetings with Micron's senior leadership team in New York and Boston, where management outlined the company's strategic positioning in the memory market.

Following the company's technology and product webinar, Bank of America analysts met with Micron's Chief Operating Officer Manish Bhatia, Chief Technology Officer Scott DeBoer, Chief Financial Officer Mark Murphy, and Corporate Vice President of Investor Relations Satya Kumar. The meetings reinforced the firm's positive outlook on memory's long-term value, with management indicating tighter market conditions expected in calendar years 2027 and 2028 compared to 2026.

Bank of America rates Micron as a buy with a $1,550 price target. The firm emphasizes five key factors supporting its recommendation. First, memory remains the critical enabler of artificial intelligence performance and power efficiency.

Second, current memory de-specifications reflect supply shortages rather than reduced significance, with more memory capacity translating to higher token output per dollar.

Third, supply chain agreements provide greater flexibility spanning three to five years as take-or-pay arrangements with financial commitments.

Fourth, Micron maintains technology leadership across high-bandwidth memory, DRAM, and NAND products.

Fifth, the company plans to increase capital returns to shareholders beginning December 9.

Management views memory as increasingly becoming the most critical architectural component in AI systems. Current supply chain agreements cover approximately 35 percent of total sales, with a target of 50 percent by calendar year 2030. The pricing framework includes a floor well above prior cycle highs.

Micron's product roadmap includes support for HBM configurations from 4-hi through 16-hi, four additional planar DRAM nodes after 1-gamma, and G11 NAND targeting over 400 layers by late 2027. The company expects to generate approximately $150-200 billion in annual free cash flow during calendar years 2027-2028, with approximately $35 billion currently authorized for share repurchases.

Original Article

You May Also Be Interested In

• Micron shares dip as Samsung’s post-earnings selloff spreads to memory peers
• Micron Announces Over $67 Million in New Idaho Community Investments for Transportation, Housing and Children
• Gen Digital surges 11% on raised outlook and strong Q2 beat