BofA’s 65% Rally Call: Micron’s Rollercoaster and AI-Driven Hope

Posted on by

(SeaPRwire) –   By: Oliver Hawthorne

Micron (MU) stock experienced a turbulent week, dropping 7% on Friday after a 3.2% gain the day prior. Yet, Bank of America’s bullish stance remains unshaken, eyeing a remarkable 65% rally from current levels. The memory chip sector has been fraught with uncertainty, but Micron’s third-quarter performance offers a glimmer of optimism.

Micron’s fiscal Q3 revenue soared to a record $41.46 billion, a staggering 346% year-over-year increase. Free cash flow reached a historic $18.3 billion, and operating cash flow hit $25.39 billion. Despite a 12.8% decline over the past 30 days, the company’s financials paint a robust picture. Bank of America reaffirmed its Buy rating with a $1,550 price target, dismissing fears that China’s Kimi K3 AI model would dampen AI infrastructure spending. Instead, the bank argues more efficient AI models will drive demand for high-bandwidth memory (HBM), DDR5, and NAND storage.

Micron’s long-term supply agreements with automotive heavyweights like Ford, General Motors, Qualcomm, Denso, Harman, and Visteon add another layer of stability. Management expects Q4 revenue to hit approximately $50 billion and non-GAAP EPS around $31. The stock currently trades at 21.5 times trailing earnings and 13.1 times forward earnings, below the broader semiconductor average. Multiple firms, including KeyBanc, TD Cowen, Bernstein, and Citigroup, share the bullish sentiment, with a consensus price target near $1,495, suggesting ~60% upside.

Next week, earnings from Microsoft and Amazon could act as catalysts for memory stocks. If either company signals increased data center spending—similar to Alphabet’s recent positive outlook—memory names could receive another boost. The commercial landscape for Micron is shaped by AI’s growth and automotive partnerships, creating a dual tailwind. While chip pricing concerns persist, BofA’s confidence and Micron’s strong fundamentals position the stock for potential significant gains.

Author bio: Oliver Hawthorne, Principal Correspondent permanently stationed at an international technology review, specializing in semiconductor market analysis and stock performance insights.