Wedbush says chip rally has further to run after Micron's blowout quarter

Wedbush has reiterated its bullish stance connected exertion stocks aft Micron Technology Inc (NASDAQ:MU), the US representation chipmaker, delivered a 4th that the broker said should alleviate capitalist concerns implicit the sector.

Analyst Dan Ives said the results showed the representation and spot commercialized remained intact and was inactive successful the aboriginal stages of playing out, with the artificial quality roar lone successful its 3rd inning.

Micron reported third-quarter gross of $41.5 billion, up 74% connected the anterior 4th and good up of the $35.9 cardinal expected by analysts.

Its information centre gross has present reached an annualised tally complaint of astir $100 billion, Wedbush noted.

Earnings per stock came successful astatine $25.11, much than treble the erstwhile 4th and up of the $20.86 consensus, portion gross borderline of 84.9% bushed expectations.

Wedbush highlighted that request for Micron's NAND and DRAM representation chips continued to importantly transcend manufacture supply, pointing to choky conditions and beardown pricing power.

The institution besides signed 16 strategical lawsuit agreements, 14 of which transportation cumulative gross of astatine slightest $100 cardinal implicit the word of the deals.

Guidance impressed the broker further, with Micron forecasting fourth-quarter gross of $50 billion, against the $43.6 cardinal the marketplace had expected.

Wedbush said the institution expects choky proviso conditions to persist beyond its 2027 fiscal year, with gross borderline guided to astir 86%.

Micron besides said it intends to instrumentality each excess currency to shareholders arsenic escaped currency travel builds.

Ives framed the results against rising nervousness implicit the AI trade, pursuing caller weakness successful South Korea's KOSPI scale and renewed warnings from sceptics.

He argued the figures showed nary cracks successful AI request crossed either hardware oregon software, giving what helium called a greenish airy to ain the halfway exertion winners into year-end.

The connection from customers and main accusation officers was clear, Ives said, with the gait of AI adoption accelerating and the absorption shifting to launching endeavor usage cases successful the 2nd fractional of 2026.

Wedbush said caller checks crossed Asia had reinforced its confidence, pointing to beardown request trends and a stronger maturation trajectory up for the sector.

The broker rates Micron astatine outperform with a terms people of $1,300, against a caller terms of astir $1,052.

Ives flagged risks, including a slowdown successful endeavor IT spending, accelerated exertion disruption, rising contention crossed the AI stack, and geopolitical tensions betwixt the United States and China that could disrupt the semiconductor proviso concatenation