On Monday, Barclays maintained its Overweight rating on Micron Technology (NASDAQ:MU), increasing the price target to $120 from the previous $95. The adjustment follows a trip to Asia, which provided insights into the company's market position and product developments.
Micron Technology, recognized as the second-largest supplier of the H200, is anticipated to see a significant increase in product ramp-up in the second quarter of 2024. The analyst from Barclays noted that the only constraint to Micron's potential growth is the tight capacity in Through-Silicon Vias (TSV), which is expected to remain a challenge throughout the year.
In the NAND sector, current utilization is approximately 30% below what is considered normal levels. Memory makers show little interest in expanding capacity in this area. At the beginning of the year, end demand for NAND was softer than anticipated, leading to slightly higher inventory levels than preferred.
Despite these challenges, the transition of expenditure towards DRAM and the maintained lower production levels have provided some leeway in NAND pricing. This flexibility is seen as a positive development for Micron.
The report concluded with the Barclays analyst expressing optimism about Micron's prospects, leading to an increase in DRAM estimates and the raised price target for Micron's shares. The new target reflects a more bullish outlook on the company's financial performance and market position.
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