What's Happening With Micron Stock?

Stock Performance - Micron Technology stock has risen by about 85% through mid-June but has fallen by close to 40% since then, resulting in year-to-date returns of about 8% [1] - MU stock has gained 20% from $75 in early January 2021 to around $92 now, compared to a 40% increase in the S&P 500 over the same period [4] Memory Market Recovery - DRAM chip prices are recovering, with server-side DRAM memory prices forecasted to rise by 13% sequentially in Q3 and PC memory by 8% [2] - The recovery is driven by lower capital spending by DRAM producers and higher demand from the generative AI space [2] Financial Performance - Micron posted Q3 FY'24 revenue of $6.81 billion, up from $3.75 billion in the year-ago period, with adjusted earnings of $0.62 per diluted share [2] - Q4 guidance projects earnings of $1 to $1.16 per share on an adjusted basis, in line with consensus [2] Generative AI Impact - Generative AI models require considerable storage, driving demand for DRAM products and High Bandwidth Memory (HBM) [3] - Nvidia's latest Blackwell AI systems feature a 33% increase in HBM3E content [3] - Micron's HBM capacity for 2024 is completely sold, with most of its HBM supply already allocated for 2025 [3] Valuation and Market Position - Micron's stock is trading at about 10x consensus FY'25 earnings [4] - The company has a $114 price estimate, which is about 22% ahead of the current market price [4] Industry Comparison - Arista Networks, benefiting from generative AI, has seen its stock surge by more than 300% over the same period, compared to Micron's 20% gain [4] - Arista is part of the Trefis High Quality Portfolio, which has outperformed the S&P 500 each year over the same period [4]