Goldman says this chip stock is an underappreciated AI beneficiary, sees big upside

Goldman Sachs calls chipmaker Micron Technology an “underappreciated” beneficiary of artificial intelligence, forecasting 17% upside for the next 12 months. The Wall Street firm reiterated its buy rating on Micron ahead of its earnings report on March 20 and hiked its 12-month price target to $112 from $103 previously. The stock is up 12% this year to close at $95.56 Wednesday. “We believe Micron is well-positioned to benefit from the proliferation of AI across data centers (i.e. the core) and the edge (e.g. PCs, smartphones) as demand for more compute drives an increase in content,” Goldman analysts said in a note to clients. MU YTD mountain Micron Technology Goldman noted that despite its strong demand and fundamentals, Micron has underperformed its peers this year across the compute and networking industries, such as Nvidia , AMD , Arm , Broadcom and Marvell . This underperformance presents investors a buying opportunity, according to the firm. “We believe the stock’s recent underperformance vis-a-vis its peers in Compute (NVDA/AMD/ARM) and Networking (AVGO/MRVL/CRDO) presents an opportunity for investors to buy/own MU ahead of a material ramp in HBM revenue (which is accretive to corporate gross margins),” Goldman said.