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Micron to rally nearly 30% on rising demand for its memory chips: JPMorgan

Kai Pfaffenbach | Reuters

Investors should buy Micron Technology shares because new technology markets will generate more demand for its memory products, according to JPMorgan, which reiterated its overweight rating on the chipmaker.

"We believe investors are underestimating the positive impact of new and broad-based demand drivers beyond PCs and smartphones in areas such as AI/Deep Learning and continued strength in data center/networking," analyst Harlan Sur wrote in a note to clients Tuesday.

"We expect supply of memory components to remain tight at least for the next few quarters and, though we anticipate ASPs [average selling prices] returning to its normal trend of typical sequential declines in 2018, we anticipate Micron driving margins higher in FY18 on continued cost reductions in NAND [flash memory] and DRAM [memory]."