Micron Technology Inc. (NASDAQ:MU) remains a key beneficiary of the AI-driven memory cycle as tight supply, rising prices, and a shift toward inference support demand for DRAM and high-bandwidth memory.
The stock gained more than 4% in Wednesday premarket trading as memory pricing optimism strengthened after SK hynix Inc. (NASDAQ:SKHY) reported record third-quarter results.
SK Hynix Results Support Memory Pricing Outlook
On Tuesday, SK hynix reported a record operating profit of 83.33 trillion won ($62.55 billion), up 632% year over year and exceeding analysts’ estimates of 76.7 trillion won.
Revenue surged 328% to 104.62 trillion won ($78.52 billion), while its operating margin widened to 80%.
The company said supply “is not keeping pace with the growth of the market” and expects demand to remain above supply through 2030.
The update reinforced expectations that major memory suppliers, including Micron, could continue benefiting from tight industry capacity.
Futurum Sees Multi-Year Supply Constraints
Futurum CEO Daniel Newman said Micron, SK hynix and Samsung Electronics Co. Ltd. (OTC:SSNLF) currently hold unusually strong pricing power because AI demand continues to constrain DRAM and HBM supply.
Newman told CNBC on Wednesday that he expects several trends to keep memory supply tight for years. He said Chinese producers could eventually add significant DRAM capacity, but argued they remain years away from producing competitive HBM for advanced AI inference.
He also said the current cycle may differ from previous memory cycles, with shortages potentially lasting five to seven years and extending into the 2030s. That environment could give suppliers such as Micron more pricing leverage than they historically held during oversupply periods.
See More:
Top Growth Stocks
Susquehanna Prefers Micron For Inference Shift
Susquehanna analyst Mehdi Hosseini said he prefers Micron over SK hynix because Micron offers a more diversified product portfolio as AI moves from training toward inference.
Hosseini told CNBC on Wednesday that he expects memory and networking to contribute increasing value to AI systems over the next several years. He sees the memory cycle remaining supportive for another couple of years, although margins could normalize.
He said inference relies more heavily on server DRAM and multiple DRAM types, compared with training’s heavier reliance on HBM, giving Micron an advantage through its broader portfolio.
Micron carries a consensus Buy rating and an average analyst price forecast of $1,622.38.
On Oct. 22, Rosenblatt maintained its Buy rating and $1,900 price forecast. Needham also reiterated its Buy rating that day, maintaining a $1,650 price forecast. Earlier, on Oct. 13, Rosenblatt reaffirmed its Buy rating and $1,900 price forecast.
Technical Analysis: Can Micron Extend Its Rally?
Micron remains in a strong long-term uptrend. Shares are trading about 30.5% above their 200-day simple moving average (SMA) of $737.90.
The stock has gained 318.53% over the past year. However, it has cooled from its 52-week high of $1,255, reached in June.
In the short term, Micron faces some technical pressure. Shares are trading 1% below the 20-day SMA of $972.37 and 1.7% below the 50-day SMA of $979.71.
Additionally, the stock sits 0.8% below its 100-day SMA of $970.37. These levels could act as resistance during a recovery.
The 20-day SMA remains below the 50-day SMA, signaling short-term weakness. Nevertheless, the 50-day SMA remains above the 200-day SMA, supporting the longer-term bullish outlook.
Micron’s relative strength index (RSI) stands at 45.32, placing it in neutral territory. This suggests the stock is neither overbought nor oversold.
Key resistance stands at $1,042.50. A move above this level could support further gains. Meanwhile, key support sits at $902.50. A decline toward that level could test buyers’ willingness to defend the stock.
Price Action
MU Stock Price Activity: Micron Technology shares were up 4.14% at $967.24 during premarket trading on Wednesday, according to Benzinga Pro data.
Photo via Shutterstock
