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Nomura doubles price target on Micron

Micron Technology Double-Data-Rate Synchronous Random-Access Memory (SDRAM) chip
Tomohiro Ohsumi | Bloomberg | Getty Images

Nomura doubled its price target for Micron Technology on Thursday, upgrading it to buy from reduce and predicting a gain of 42 percent in the next 12 months due to improving fundamentals.

"Our change in stance is based on recent supply shortages in memory, firmer pricing, and 20nm execution," analyst Romit Shah wrote in his research note, referring to a type of microchip technology.

In the past 12 months, shares of the semiconductor maker were among the worst performers in the sector, down 48 percent.

After the severe drop, however, here are the reasons why Nomura believes the stock may be ready to roar back up: