Citi says Micron is still its top AI pick, will overcome earthquake disruption

Citigroup is keeping its bullish stance on Micron Technology even as the memory chipmaker faces disruptions caused by this week’s earthquake in Taiwan. Boise, Idaho-based Micron said in an update that all of its staff have been accounted for and that it would be “evaluating [the earthquake’s] impact to our operations and supply chain.” Citi analyst Christopher Danely sees a potential silver lining. “Micron has roughly 60% of its [Dynamic random access memory] manufacturing in Taiwan and we believe the earthquake could result in some scrappage of inventory, which could help pricing,” he wrote, reiterating the stock as a top pick, with a $150 price target. Semiconductor makers across the industry have been assessing the fallout from the 7.4 magnitude earthquake that rattled Taiwan, the strongest in a quarter of a century. The island is home to a flourishing chip market — including global chip supplier Taiwan Semiconductor Manufacturing — that many U.S. companies rely on. Looking ahead, Danely expects sales and earnings estimates to benefit from the growth of DRAM and high-bandwidth memory driven by companies such as Nvidia . This could yield $3 billion in revenue by 2025, he estimates. MU YTD mountain Shares this year “Investors remain concerned about the DRAM upturn due to overcapacity in 2025,” he wrote. “While we expect DRAM capex to surprise to the upside in C24 and increase 36% in C25, we believe higher spending will be offset by capacity loss due to HBM and increased demand,” Danely wrote, referring to high-bandwidth memory. Danely’s price target on Micron implies 21% upside from Thursday’s close. Shares have already rallied more than 45% since the start of the year.