Should you support a company if the government does? That’s a personal choice, of course. However, there’s no denying that Micron Technology (NASDAQ:MU) will have a huge advantage with the government’s financial support. For that reason, it makes perfect sense to buy Micron Technology stock now.
Really, it’s not a question of whether the Micron share price will go up, but how high it will go. One big-bank analyst posits that the stock has plenty of room to rally, but don’t just take his word for it. Conduct your own due diligence on Micron, and you’ll surely see the value proposition of this memory chip maker.
Micron Gets Billions in Government Support
You might wonder exactly where all of that CHIPS and Science Act money is going. Well, some of it — a lot of it, actually — is going to Micron.
According to Bloomberg, the U.S. government plans to award Micron $6.1 billion in grants and up to $7.5 billion in loans. This funding will help Micron build two out of four “fabs” (chip-fabrication factories) in the state of New York and another one in Idaho.
No one can predict with certainty who the president will be after January of 2025. For now, however, Micron clearly has the Biden administration’s full support.
The financial awards to Micron will be the “largest private investment in New York and Idaho’s history,” according to a statement from the White House. Now, you might agree or disagree with the government’s big-money backing of Micron.
Yet, when any company — Micron or otherwise — has such strong government support, that’s a major pillar of the bull case for investors.
Can Micron Technology Stock Really Get to $150?
Certainly, federal funding should enhance Micron’s value proposition. How much should the company’s investors expect, though? Could Micron actually get to $150 in the next 12 months?
Citigroup analysts seem to believe so, as they recently reiterated their “buy” rating and assigned a $150 price target to Micron shares. This implies a substantial stock-price upside, but it’s not an unrealistic target.
Per TheFly, the Citigroup analysts “would buy the stock on any weakness, saying the DRAM recovery is supply, not demand driven.” DRAM, or dynamic random access memory, is a computer’s main memory function.
Memory-chip demand won’t be an issue for Micron. Just think about how much memory will be needed for artificial intelligence applications in the coming quarters. The product supply may need to be right-sized, but if that’s Micron’s biggest problem, it’s not the worst problem a company can have.
Micron stock might not get to $150 in exactly 12 months. Does the exact timing really matter, though? Remember, Micron’s revenue grew 58% year over year in fiscal 2024’s second quarter. This company is growing fast, and the share price should move much higher sooner or later.
Micron Technology Stock: The Road to $150 Starts Today
Truly, this is a wealth-building opportunity that’s hard to resist. The government just pledged billions of dollars in funding to Micron. That, right there, is a valid reason to invest in Micron for the long term.
Plus, the demand for AI-compatible memory chips should help Micron continue its impressive growth trajectory.
Ultimately, Micron stock is destined to break above $150 — maybe in a year, maybe sooner, maybe later. Regardless of the exact timing, I encourage you to pick up some Micron shares and get started on the road to riches.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
