Growing confidence in Micron 's business for 2022 could make the stock an outperformer among semiconductor stocks next year, according to Bank of America. Analyst Vivek Arya upgraded Micron to buy from neutral, saying in a note to clients that the company's performance should improve in 2022 and drive its shares higher. On Monday, Micron beat estimates on the top and bottom lines for its fiscal first quarter, and its guidance also stood out as a positive to Bank of America. "Overall we view MU as a compellingly growth-at a reasonable price (GARP) beneficiary of secular data center, 5G, metaverse, auto trends and a catch-up candidate after underperforming the SOX Index meaningfully in CY21," the Bank of America note said. Uncertainty around demand has been one of the issues weighing on some semiconductor stocks, but Bank of America said Micron's trends should be more clear next year. "Micron (MU)'s inline FQ1 (Nov) but strong FQ2 (Feb) outlook addresses our key prior concern re. a prolonged inventory digestion (and related DRAM price pressure) in the PC market. FQ2 will likely be the bottom of this (mini) cycle," the note said. Bank of America hiked its price target on the stock to $100 per share from $76. The new target is nearly 22% above where the stock closed on Monday. Shares of Micron were up 8% in premarket trading. Heading into Tuesday's session, the shares were up 9% year-to-date, trailing the semiconductor sector and the broader market. -CNBC's Michael Bloom contributed to this report.
Stephen Nellis | Reuters
Growing confidence in Micron's business for 2022 could make the stock an outperformer among semiconductor stocks next year, according to Bank of America.