Micron Technology (MU) stock has been under pressure despite reporting market-crushing fiscal second-quarter results, driven by robust demand for its memory solutions amid the AI boom and high pricing due to tight supply. MU stock has pulled back more than 15% over the past five trading sessions, though it is still up about 292% over the past year. Some analysts think that the selloff is due to profit-taking amid concerns about high capital spending in Fiscal 2027. Also, MU and other memory stocks, including SanDisk (SNDK), have plunged since Alphabet’s Google (GOOGL) unveiled TurboQuant, a new compression method that the tech giant says could reduce the amount of memory required to run large language models by six times.
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Two ETFs for long or short leverage on SNDKDespite the recent selloff, most analysts, including top Morgan Stanley analyst Joseph Moore, remain upbeat about Micron stock and see the pullback as a buying opportunity.
Morgan Stanley Analyst Remains Bullish on Micron Stock
On Thursday, Moore reiterated a Buy rating on Micron Technology and peer SanDisk. The 5-star analyst views the selloff in these stocks as a “healthy pricing in of durability concerns,” including those related to capital expenditure, demand destruction, and productivity.
Moore views the strength in memory demand as more durable than the market expects, with limited supply posing a major bottleneck for AI growth. He contends that those taking sell cues from prior cycles are missing the point. Moore noted that memory shortages are intensifying amid strong demand, and customers are paying in advance for large-volume deals as they believe that these shortages will persist.
Regarding Google’s TurboQuant memory optimization, following talks with industry contacts, Moore said that it is an “evolutionary development, with basically no surprises for memory.” At these earnings levels, Moore expects Micron and SanDisk’s annual cash generation to be 15%-25% of current market caps and believes that “while it won’t last forever, it is going to last for long enough to see the stocks move materially higher.”
Is Micron Stock a Buy, Sell, or Hold?
With 26 Buys and two Holds, Wall Street has a Strong Buy consensus rating on Micron Technology stock. The average MU stock price target of $536.55 indicates about 50.2% upside potential from current levels.
