Micron Stock Finds Its Footing as It Pushes Back on Chinese Memory Threat

Micron’s stock price has more than tripled this year so far. (Photograph by Tomohiro Ohsumi/Bloomberg)

Key Points

Micron Technology shares rose, helping the stock establish a floor after recent losses.
Micron rejected a new 4F2 memory design championed by Chinese rival CXMT, citing scaling and density limitations.
Wedbush analyst Matt Bryson said fears regarding CXMT and the 4F2 format are severely overblown.

Micron Technology stock looks to be establishing a floor after its recent losses. The memory-chip company’s pushback against a new hardware format championed by a Chinese rival is helping.

Micron shares were up 1.4% at $889.80 in early trading Monday. That was set to add to a 2.5% gain in Friday’s session which could put an end to its recent slide from levels of more than $1,000.

The stock is being buffeted by doubts about the artificial-intelligence trade as a whole. Micron can’t do much about that but it can fight back about concerns China’s CXMT is developing a new format of memory—the so-called 4F square design (4F2)—which could see it gain market share.

Micron has told analysts in recent days that it has rejected 4F2 as a design choice because of the limitations in scaling and density compared with its preferred path of 3-D dynamic-random access memory.

“If Micron is correct in its view, it very much suggests that China. is trying to find an alternative path to bridge its process disadvantage,” wrote Wedbush analyst Matt Bryson in a recent research note. “Every conversation we’ve had around CXMT and 4F2 suggests that fears on this front are severely overblown.”

Bryson has a $1,400 target price and Outperform rating on Micron shares, based on a price-to-earnings multiple of six times his estimates for its fiscal 2028 earnings.

“We view a ~6X multiple as appropriate for MU given the further-out estimate year, while seeing room for upside to this assumption as investors gain comfort with the durability of earnings beyond 2027,” Bryson wrote.

Barron’s previously argued Micron could double when it traded at around $1,100 amid a continued memory shortage. That’s going to need investors to become more confident about the AI trade in general but soothing Chinese competition fears is a good start.

Write to Adam Clark at adam.clark@barrons.com

参与讨论