Bank of America revamps Micron stock price on earnings

Core Insights - The rise of artificial intelligence (AI) has significantly impacted the tech market, particularly benefiting memory manufacturers like Micron, which does not produce AI software or GPUs but supplies essential memory components [1] - Micron is the third-largest supplier of memory chips, including DRAM, NAND, and high-bandwidth memory (HBM), with HBM chips being crucial for the AI market due to increasing demand driven by powerful GPUs [1] - The company reported a 46% year-over-year revenue growth in Q4 of fiscal 2025, reaching $11.32 billion, indicating strong performance and momentum heading into fiscal 2026 [3][6] Financial Performance - Micron's Q4 revenue was $11.32 billion, up from $7.75 billion in Q4 2024 [6] - Net income for Q4 was $3.20 billion, compared to $887 million in the same quarter of the previous year [6] - Diluted earnings per share increased to $2.83 from $0.79 year-over-year [6] - Operating cash flow rose to $5.73 billion from $3.41 billion in Q4 2024 [6] - Gross margin improved to 44.7% from 35.3% in Q4 2024 [6] Market Outlook - The company anticipates a meaningful increase in demand for high-capacity enterprise SSDs, which are built with NAND flash memory chips, addressing a shortage of hard drive storage for hyperscalers [5] - Analysts from Bank of America have raised Micron's price target, citing strong support from surging AI demand and improved pricing in the memory industry [8][9] - The resurgence in traditional server CPU sales, driven by AI applications, is also seen as a positive factor for Micron's growth [9]