Key Takeaways
- Micron shares declined 4.7% in Tuesday’s premarket session to $963.79, retreating after surpassing $1,000 in the previous session.
- Climbing bond yields weighed on semiconductor stocks broadly, with SK Hynix sliding 5.1% and Sandisk dropping 5.5% premarket.
- Bank of America designated Micron as a “top pick,” projecting fiscal 2030 earnings per share between $200-$250, significantly above consensus estimates of $160-$170.
- CNBC’s Jim Cramer believes Micron has potential to “double again,” citing robust AI-driven demand and aggressive buyback programs as catalysts.
- Apple faces an August 21 Senate deadline to address recommendations regarding its memory chip procurement from Chinese manufacturers.
Shares of Micron Technology (MU) retreated 4.7% during Tuesday’s premarket hours, trading at $963.79, breaking a five-session winning streak that had lifted the stock beyond $1,000 for the first time since early July.
The decline occurred alongside broader semiconductor weakness triggered by ascending bond yields. SK Hynix tumbled 5.1% in premarket U.S. trading, while Sandisk slid 5.5%. Elevated bond yields increase capital costs and typically weigh on growth-oriented equities.
The previous session had delivered strong performance for Micron. Shares advanced 4.1% to settle at $1,011.75, marking the fifth consecutive session of gains. Sandisk surged nearly 9%, Western Digital climbed 5.4%, and Seagate advanced 2.2%. The Roundhill Memory ETF (DRAM) jumped 5.4%.
Memory sector equities had retreated from June peaks but demonstrated renewed momentum throughout August as the second-quarter reporting period concluded.
BofA Elevates Micron to Top Pick Status
Bank of America elevated Micron to “top pick” status on Monday, projecting earnings could substantially surpass current analyst expectations. The firm anticipates Micron’s fiscal 2030 earnings per share will land between $200-$250, contrasting sharply with Street consensus forecasts of $160-$170.
BofA highlighted SanDisk’s “durable growth outlook” as validation that the broader memory industry may be transitioning into a period of structural strength.
According to FactSet data, Wall Street analysts maintain an average price objective of $1,549 for Micron. The stock has surged over 700% during the trailing twelve months.
Robust cloud expansion and unprecedented data-center capital expenditures from leading technology companies have fueled the rally in memory stocks. Some skeptics contend the extended demand narrative is already reflected in current valuations.
An emerging catalyst drawing attention involves U.S. government pressure on Apple to reduce reliance on memory chip suppliers based in China. This development could favor domestic producers like Micron. The Senate has established August 21 as Apple’s response deadline.
Cramer Projects Another Doubling for MU
CNBC’s Jim Cramer expressed confidence in Micron’s continued upward trajectory. “I think Micron can double again before the boom comes to an end, assuming there’s no data center slowdown,” he stated.
Cramer emphasized share repurchase initiatives as an additional bullish factor. Sandisk maintains $15.5 billion available under its buyback authorization. Seagate is executing a $5 billion program. Western Digital approved an incremental $4 billion authorization earlier this year.
Cramer’s Charitable Trust, the investment portfolio associated with CNBC’s Investing Club, established a position in Micron recently.
The approaching August 21 Senate deadline for Apple’s chip sourcing response represents the next immediate catalyst for memory sector traders.
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