Micron Technology (NASDAQ:MU) was hopping yesterday, as the memory chip maker continues to ride a strong wave of AI-driven demand. While its ~8% gains were no doubt partly due to market-wide relief over the extension of the ceasefire in the Middle East, the company is clearly benefiting from the seemingly insatiable appetite for memory products.
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Another piece of news hit the airwaves yesterday, which also likely contributed to MU’s surge upward. Reports surfaced that Micron has been lobbying the U.S. Congress to craft legislation that would put export restrictions on equipment for Chinese chipmaking facilities. Such a law could slow the progress of would-be competitors from China, further protecting Micron’s place in the industrial ecosystem.
While few would question MU’s past performance, the big concern among bears is the cyclical nature of the memory business. Supply will eventually catch up to demand, the thinking goes.
Bulls would counter that AI fundamentally changes that calculation, supercharging longer periods of growth. Micron’s forecasted revenue for the current quarter of $33.5 billion is within shouting distance of the $37.4 billion it delivered in the entire fiscal 2025 year (itself an increase of almost 50% year-over-year).
That pace of growth is causing top investor John Ballard to draw parallels with another technology firm that’s been a prime beneficiary of the AI bonanza.
“That kind of acceleration is similar to what Nvidia experienced early in the data center boom, when exploding demand for artificial intelligence chips pushed data center revenue sharply higher,” states the 5-star investor, who is among the top 4% of stock pros covered by TipRanks.
While acknowledging the cyclical worries, Ballard notes that the growth of physical AI products like humanoid robots is altering these dynamics. The investor cites Micron CEO Sanjay Mehrotra, who has predicted a 20-year growth vector due to the build-out of AI-powered robotics.
Therefore, whether Micron remains a cyclical business is less interesting than its supercharged potential during these years of plenty, adds the investor.
“Micron may remain a cyclical business. But it could still see higher peaks and valleys in revenue over the next few decades,” concludes Ballard. (To watch Ballard’s track record, click here)
Wall Street is certainly on board, at least for the near future. With 25 Buys and 3 Holds, MU sprints to a Strong Buy consensus rating. Its 12-month average price target of $543.20 points to an upside of 11%. (See MU stock forecast)
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.