Micron Technology Inc. stock took a hit recently as analyst Karl Ackerman of BNP Paribas Exane downgraded the company, predicting continued underperformance compared to other artificial intelligence (AI) related stocks. While most analysts have buy ratings on Micron, Ackerman’s sell recommendation and low price target of $67 sent the stock tumbling 6% to $85.21.
Ackerman’s concerns revolve around a capacity oversupply of high-bandwidth memory (HBM) chips, which could lead to a faster market correction in conventional DRAM ASPs. Despite Micron’s optimistic outlook for its HBM chips, some investors are cautious about the company’s ability to meet AI-related demands.
Despite the recent drop in Micron’s stock price, some analysts see potential for growth. Raymond James analysts remain positive on the company, citing ongoing yield improvements and attractive valuation metrics. Micron currently trades at less than 9 times estimated earnings, making it one of the most undervalued stocks in the Nasdaq 100 Index.
Looking ahead, Micron is set to report its fourth-quarter results later this month, which could provide more clarity on the company’s performance and future prospects. While the stock may face near-term challenges, analysts believe that Micron’s long-term growth potential and focus on HBM technology could drive future success.
In a market characterized by volatility and uncertainty, investors should carefully evaluate their options and consider the long-term potential of companies like Micron. With unique insights and expert analysis, Extreme Investor Network is committed to helping investors make informed decisions and navigate the complex world of finance. Stay updated on the latest trends and developments in the financial world by visiting Extreme Investor Network for exclusive content and expert advice.