Micron Technology (NASDAQ:MU) stock has traded sideways since July, in line with other leading memory chipmakers. Shares currently trade at $1,015, up 212% year to date. This consolidation could end soon, as the company is set to report its financial results later this month.
Micron Technology Earnings to Publish Strong Earnings
MU stock has held steady in the past few months in line with other memory companies like SK Hynix, Samsung Electronics, SanDisk (NASDAQ:SNDK), and Western Digital (NASDAQ:WDC).
The company is expected to publish strong financial results next week since it has become a top beneficiary of the AI boom. Recent results by its biggest clients like Nvidia (NASDAQ:NVDA), AMD, Microsoft, and Amazon, have all published strong numbers and hinted of more spending.
The average estimate among Wall Street analysts is that Micron’s fourth-quarter revenue will come in at $50.9 billion, up by 350% from a year earlier. If this is correct, it will bring its full-year figure to $129 billion, up by 247% YoY. Historically, Micron has a strong record of beating estimates, meaning that its real numbers will be much better.
Analysts expect Micron’s revenue to jump to $245 billion in the next financial year. Earnings per share are forecast to reach $73, followed by $156.50 the year after. The stock could extend its gains if earnings and guidance come in well above expectations.
These numbers come at a time when the company is still a bargain. The company has a forward price-to-earnings ratio of 13.8, much lower than the technology sector median of 22.80. The multiple is also much lower than the five-year average of 74.
The challenge, however, there is a fear that the AI sector will start slowing down as safety concerns remain. Some of the top executives in the industry, including those from Anthropic and OpenAI have called for a slowdown.
Micron Stock Has Formed an Ascending Triangle Pattern
Technicals suggest that MU stock may be on the cusp of a strong bullish breakout. It has formed an ascending triangle pattern, which is made up of an ascending trendline and a horizontal resistance. This pattern often results into a strong bullish breakout.
Micron remains above the 50-day Exponential Moving Average (EMA) and the Supertrend indicator. These technicals suggest that the stock may have a strong bullish breakout in the near term, possibly after earnings.
If this happens, the next level to watch will be at $1,255, its highest point in June. This view aligns with what analysts expect, with the consensus among analysts being $1,295. Top analysts from companies like RBC, TD Cowen, and New Street Research expect it to continue rising.
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