Micron jumps as earnings, guidance top expectations, Wall Street approves
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Micron Technology (NASDAQ:MU) shares rose in premarket trading on Wednesday after the company posted better-than-expected earnings and guidance, prompting approval from Wall Street analysts.
Mizuho Securities analyst Vijay Rakesh raised his price target on Micron to $113 from $110, while maintaining a buy rating, noting that the company is "well positioned" this year with opportunities in data center, PC and mobile and a "potentially improving pricing environment."
Rakesh noted that the second-quarter results and third-quarter guidance were "well above consensus with [quarter-over-quarter] growth in storage and compute and longer-term tailwinds from product mix and content increases," adding that it is a positive read-through for Western Digital (WDC), Applied Materials (AMAT) and Lam Research (LRCX).
Micron (MU) shares rose slightly more than 4% to $85.54 in premarket trading.
For the period ending March 3, Micron said it earned $2 a share on $7.79 billion in revenue. Gross margins, a closely watched measure, came in at 47.2%. During the quarter, Micron generated $3.63 billion in operating cash flow, down from $3.94 billion in the prior quarter but above the $3.06 billion it generated in the year-ago quarter.
For the third quarter, Micron said it expects revenue to be between $8.5 billion and $8.9 billion, with adjusted earnings per share expected to be between $2.36 and $2.56 per share. GAAP gross margins are forecast to come in between 46% and 48%.
Bank of America analyst Vivek Arya, who reiterated his buy rating and $118 price target on Micron (MU) following the quarter, raised 2022 and 2023 sales and earnings estimates after the results, while also noting the potential benefits for other companies. 
Arya noted that Micron's (MU) strong outlook for cloud should benefit Nvidia (NVDA), Advanced Micro Devices (AMD), Marvell Technology (MRVL), Broadcom (AVGO), as well as the aforementioned Applied Materials, Lam Research and KLA Corp (KLAC).
"We believe [long-term] agreements (now 75% of sales and close to 100% of large customers) dampen price/demand volatility which should help sustain better profitability throughout the cycle," Arya added.
However, the analyst cautioned that while Micron is benefiting from a wide variety of product cycles and has seen improvements in "some non-memory component shortages," there are still certain areas, such as logic and analog chips that could remain in short supply until 2023, adding to uncertainty. 
Last week, Micron's (MU) Chief Executive Sanjay Mehrotra testified in front of Congress to ask for more government support for the domestic semiconductor industry, though Bank of America said it would not be a "silver bullet."