Memory Stocks Dip, but Micron’s (MU) Outlook Remains Strong, According to Morgan Stanley

Core Viewpoint - Micron Technology, Inc. (NASDAQ:MU) is positioned favorably in the market, with strong growth prospects driven by demand in the AI sector and a positive outlook despite recent declines in memory stocks [2][4]. Group 1: Financial Performance - Micron is expected to report $12.5 billion in revenue for the first quarter of fiscal 2026, marking a 45% increase from the same period last year [3]. - Non-GAAP earnings are projected to reach $3.75 per share, more than double the $1.79 reported in the year-ago quarter [3]. Group 2: Market Outlook - Morgan Stanley raised its price target for Micron to $338 from $325, maintaining an Overweight rating, indicating confidence in the company's future performance [2]. - The recent selloff in memory stocks is viewed as unwarranted due to tightening memory supply, which suggests strong earnings ahead [2]. Group 3: Strategic Investments - Micron plans to invest 1.5 trillion yen ($9.6 billion) in a production facility in western Japan to manufacture AI-focused chips, diversifying advanced chip production away from Taiwan [4]. - The investment will focus on next-generation high-bandwidth memory (HBM) chips, essential for AI computing [4].