Why Micron Technology Rallied Today

Shares of Micron Technology (NASDAQ: MU) rallied 6.8% on Monday, as of 1:41 p.m. ET.

The memory chip supplier will hold its earnings on Wednesday, as one of the last major companies to report before the year closes out. Ahead of Wednesday's news, one analyst reiterated his buy rating and bullish price target.

Citi maintains $150 per share

Today, Citigroup sell-side analyst Christopher Danley published a bullish note ahead of earnings, maintaining a buy rating and a $150 price target.

Though Micron's stock surged earlier this year, it has sold off since July, amid skepticism over the non-artificial intelligence (AI) portions of the semiconductor sector. In his note Monday, Danley admitted he expects Micron to guide below consensus for the current quarter, due to softness in the PC and smartphone markets.

However, Danley wrote, "While there is excess DRAM inventory in the PC and handset end markets (combined 50% of [fiscal 2024] sales), this should go away this spring and is being offset by strength from the data center end market (35% of F24 sales)."

Micron has seen crosscurrents, as its high-bandwidth DRAM memory products for artificial intelligence are seeing a surge in demand, even as other end markets languish in a downturn that started all the way back in 2022. However, it appears that Danley thinks the good outweighs the bad for the balance of 2025.

What to watch for Wednesday

Wall Street analysts expect Micron to deliver $8.71 billion in revenue and $1.77 in adjusted earnings per share (EPS) on Wednesday. However, as most are aware, commentary and forward guidance will also be as or more important than reported numbers.

While Danley thinks the current quarter guide may be a tad below the $8.99 billion in revenue and $1.94 in EPS, any potential sell-off could be an opportunity to pounce. After all, the demand for DRAM memory should only continue to grow in the age of AI, and Micron has been executing well of late.

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Citigroup is an advertising partner of Motley Fool Money. Billy Duberstein and/or his clients have positions in Micron Technology. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.