Shares of chipmaker Micron rose Monday following an upgrade from Goldman Sachs, which says it's more bullish on memory chip stocks.
Shares jumped 3.67% on Monday after Goldman upgraded Micron to buy from neutral and raised its 12-month price target to $56 from $40. The new price target is 23% higher from current levels.
"We are now more positive on global memory stocks. ... We believe that Micron's stock will trade more on memory pricing trends and intermediate term EPS expectations than FY20 earnings," Goldman Sachs' Mark Delaney said in a note to clients on Sunday.
Goldman said it had been "cautious" on near-term fundamentals of memory chip companies because excess inventory would lead to weaker pricing in the near-term.
"We now believe that inventory at the memory companies ... is being depleted faster than we previously expected. In addition, we continue to expect the underlying rate of production to fall below longer-term demand growth in 2020," said Delaney.
Delaney said he expects Micron's full-year 2020 earnings per share to be below Wall Street expectations but full-year 2021 earnings per share will be 30% above estimates.
The firm raised its full-year 2019, 2020 and 2021 earnings per shares estimates.
—With reporting from CNBC's Michael Bloom.