Why Micron Stock Is Up By 9% Today

Micron Stock Rallies After Strong Quarterly Report

Shares of Micron gained strong upside momentum after the company reported results for its first quarter of fiscal 2022. Micron reported revenue of $7.69 billion and adjusted earnings of $2.16 per share, beating analyst estimates on both earnings and revenue.

The company remained optimistic about its future performance: “As powerful secular trends including 5G, AI, and EV adoption fuel demand growth, our technology leadership and world-class execution position us to create significant shareholder value in fiscal 2022 and beyond”.

In the next quarter, Micron expects to report revenue of $7.3 billion – $7.7 billion and adjusted earnings of $1.85 – $2.05 per share. The company noted that it expected that situation with chips will get better in 2022, which would allow its customers to increase production, boosting demand for Micron’s products.

What’s Next For Micron Stock?

Currently, analysts expect that Micron will report earnings of $8.75 per share in the current fiscal year and earnings of $11.00 per share in the next year, so the stock is trading at 8 forward P/E, which is cheap for the current market environment.

It looks that the market became more skeptical about richly valued tech stocks in recent weeks, and investors are ready to move some capital into value plays. In case value stocks get more support at the beginning of 2022, Micron stock will have a good chance to get above this year’s highs near the $97 level.

It should be noted that Micron’s own growth story looks interesting. The company’s earnings are expected to grow by roughly 25% from fiscal 2022 to fiscal 2023, and it remains to be seen whether the market will remain so conservative in Micron’s valuation in case the company meets its growth targets. At this point, it looks that Micron stock has a good chance to develop additional upside momentum in the upcoming weeks.

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