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Microns hot streak is ending but here's what matters next for the stock - Market Watch

Micron reports earnings on Tuesday - and investors will be looking to see how bullish the company's commentary is, and whether high-bandwidth-memory prices are locked in through next year

Micron's stock rose more than 40% across the last 12 sessions.

After a 12-session run of gains that was its longest in more than 16 years, Micron Technology Inc.'s stock rally is finally cooling.

The stock (MU) was off 3.5% in afternoon trading Friday, on track to snap that winning streak that drove it more than 40% higher.
A critical moment for investors arrives next week, when the memory-chip maker will report its fiscal fourth-quarter results. Wall Street is already expecting a beat-and-raise performance on Tuesday, some analysts say - so the bigger issues will be the magnitude of the beat, the strength of Micron's commentary going forward, and whether all that is enough to meet the high expectations set by the stock near doubling over the course of 2025 to date.

TD Cowen's Krish Sankar wrote Friday that he thinks Micron could deliver November-quarter guidance that exceeds Wall Street's expectations by 15%. His primary question is whether the company has already locked in pricing for high- bandwidth-memory products for all of the next calendar year, which would be a positive development.

He'll also be keeping an eye on the company's margin commentary, as memory prices continue to move higher. Sankar sees the potential for gross margins to reach the high-40% range in the November quarter before heading above 50% in the February and May quarters. The company posted a 39% adjusted gross margin in the last May quarter.

Sankar lifted his price target on Micron shares to $180 from $150 in his Thursday note to clients. The stock recently changed hands at near $163 .

Susquehanna's Medhi Hosseini is even more bullish, with $200 price target established earlier this week. While a beat-and-raise performance likely has been priced into Micron's stock in light of the recent momentum, Hosseini doesn't think shares fully
reflect the potential for Micron to deliver $20 in annualized earnings per share down the road, by the end of 2026. The FactSet consensus is only for $14 .

He thinks Micron can see higher average selling prices and gross margins into next year, "supported by mix of high- value products and favorable supply/demand dynamics."

Chip stocks have been hot in general lately, with the PHLX Semiconductor Index SOX up about 10% over the course of September to date. Mizuho desk-based analyst Jordan Klein said he thought Micron's report would be a major driver of sector momentum "based on how bullish they sound" and how bullish the guidance is.

- Emily Bary