Mizuho raised its price targets for Micron Technology (NASDAQ:MU) and Western Digital (NASDAQ:WDC) in a note Wednesday, stating they continue to see positive constructive tailwinds for Memory, driving an upcycle into 2024E for both DRAM and NAND.
Analysts lifted the MU price target to $86 from $82 per share and the WDC price target to $55 from $52 per share.
"We see 1) supply cuts to sustain with lower capex wafer starts below demand, 2) demand better with PC/handsets, stronger Hyperscaler/Enterprise recovery lagging 1-2Qs, 3) DRAM/NAND pricing NovQ up 8-10% q/q, ahead of expectations, and expected to sustain into C24E," analysts said.
For MU the firm sees multiple tailwinds: "1) key HBM3E ramp, MU is targeting longer-term share in-line with its DRAM industry share (CY22E: ~25%) as it ramps with NVDA's GH200 and B100 (HBM3E could see prices 4-6x vs. DDR5), 2) INTC Ultra (Meteor Lake) launching into "AI PC" and could drive strong content growth from 8GB to 16GB LPDDR5, and 3) we also see potential for increased US scrutiny and restrictions on CXMT (private) 17nm DRAM into 1Q24E, which could be a tailwind for MU as DRAM supply consolidates."
The analysts noted that for WDC, HDD pricing continuing to trend up is positive for the company, while its flash memory business spinoff also brings tailwinds.