Micron Technology stock has fallen sharply from its recent highs, but KeyBanc analyst John Vinh believes the memory-chip maker could recover its losses and deliver substantial gains as demand for artificial intelligence infrastructure remains strong.
Micron shares were down 3.52% at $707 in trading on Tuesday, extending a decline that has left the stock 28% lower over the past month.
Vinh reiterated his $1,750 price target in a research note on Monday, implying potential upside of nearly 140% from current levels.
The recent weakness in semiconductor stocks has partly reflected concerns that Democratic victories in the US midterm elections could slow the construction of AI data centres and weaken demand for memory chips used in servers.
However, Vinh pointed to improving cloud-computing figures as evidence that demand remains resilient.
KeyBanc sees Micron benefiting from server demand
October data showed cloud-computing growth of 2% month-on-month and 12% compared with the same period last year.
Vinh described the figures as evidence of a “return to strong traditional server growth”.
The analyst has maintained a positive view of Micron.
Last month, he identified the company as one of his favourite semiconductor investment ideas, citing expectations that fourth-quarter dynamic random-access memory (DRAM) prices would increase by 15% to 20% from the previous quarter.
He also highlighted Google’s plans to extend long-term memory supply agreements through 2035.
Vinh’s $1,750 price target is based on applying a six-times price-to-earnings multiple to his estimate of Micron’s fiscal 2028 earnings.
The stock currently trades at around four times the consensus forecast for fiscal 2027, compared with its three-year median average of nine times.
Some investors remain cautious about using price-to-earnings ratios to value memory-chip companies because their earnings are cyclical and can make shares appear inexpensive near the peak of a cycle.
Vinh and other bullish investors, however, believe AI demand could sustain Micron’s strong earnings for at least another 18 months.
Bank of America removes Micron from top stock picks
The positive outlook comes as Micron, Nvidia and Lam Research were removed from Bank of America’s US 1 list on Tuesday.
The bank did not provide a reason for the decision, but said all three companies retained Buy ratings.
Micron is also among the technology companies participating in Anthropic’s planned private placement alongside its initial public offering.
Anthropic said on Tuesday it intends to offer 825 million Class A shares at $70 to $78 apiece.
The offering could raise up to $62.5 billion and value the AI company at as much as $1.02 trillion.
Alphabet, Nvidia, AMD, Broadcom, Micron, Microsoft and TSMC have agreed to participate in the private placement at the IPO price.
The companies’ involvement highlights the financial links developing across the AI industry.
Yardeni remains bullish on semiconductor valuations
Ed Yardeni, president of Yardeni Research, also remains positive on the semiconductor sector despite recent share-price declines.
He noted that rising earnings estimates and falling stock prices have compressed valuations.
The industry’s forward price-to-earnings ratio has declined to 13.1, below the S&P 500’s 18.7 and the information technology sector’s 18.4.
Yardeni said semiconductor valuations have historically tended to bottom near peaks in earnings growth before recovering as expectations improve.
“Such a recovery could cushion stock prices as forward earnings growth moderates to more sustainable levels,” he said.
The strategist added that AI investment could encounter “speed bumps” but would not necessarily be derailed.
His view suggests that, despite near-term volatility, continued investment in AI infrastructure could support semiconductor companies.
AI disclosure: AI tools assisted with research and drafting of this piece. An Invezz editor reviewed the facts, sources and wording before publication. Any opinions or analysis are Invezz’s, not those of an automated system.
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