In May, Micron Technology (NASDAQ: MU) became the 12th U.S. company to achieve a $1 trillion market value, and the memory-chip maker reached the milestone in record time. After hitting $500 billion earlier this year, Micron soared to $1 trillion in just 48 days.
Before this year, Tesla held the record at 230 days. And it took Nvidia nearly 500 days. But an unprecedented memory chip supply shortage pushed Micron over the line rapidly this year, alongside two other chipmakers: Samsung and SK Hynix doubled from $500 billion to $1 trillion in 82 days and 61 days, respectively.
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However, most Wall Street analysts think Micron is headed lower. The median target price of $840 per share implies 15% downside from the current share price of $990. But investors shouldn’t necessarily count that against the stock. Micron beat Wall Street’s earnings forecasts in the past six quarters, meaning analysts tend to underestimate the company.
Here are the important details.
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How Micron’s memory chips fit into the AI revolution
Most investors have heard of central processing units (CPUs) and graphics processing units (GPUs). CPUs are the brains that actually run applications and operating systems, while GPUs are the muscle that accelerate demanding workloads like artificial intelligence. But I suspect fewer investors know how memory chips fit into the equation.
CPUs and GPUs require memory. “CPUs store information in NAND, or long-term memory, and use DRAM, or working memory, to perform tasks,” according to Meera Pandit, strategist at J.P. Morgan. Meanwhile, high-bandwidth memory (HBM) is a special type of DRAM that’s essential to AI because it feeds data to GPUs at very high speeds.
Micron develops and manufacturers memory and storage solutions based on NAND flash and DRAM chips. In terms of market…
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