Bank Of America - FULL ENDORSEMENT Of Micron! BUY RATING: $1550!

So, Bank of America has come out and reiterated a buy rating on Micron at a price target of 1,550 dollars. And this is relevant because I wanted to go over some of the key reasons that Bank of America is coming out and reiterating that. And so, the analyst is Vivek Arya, who is the managing director and semiconductor analyst at Bank of America Securities, again reiterating a buy and a price target of 1,550 dollars. Now, I'm recording this video in after-hours trading, and you can see right now that Micron basically closed the last trading session at 992 dollars. So, we've got north of, you know, 560 dollar upside here. Now, this is what I would call kind of a middle-of-the-road buy rating because there are ratings from other analyst firms out there that go as high as 2,200 dollars. But, I thought that this one was really interesting. Number one, it's Bank of America, one of the biggest, most well-named names, you know, well-known names out there. And I wanted to dig into this because there's some very, very key things that Vivek has pointed out as to the reason for reiterating the 1550 buy rating, and we want to jump into that. So, I want to kind of preface this and reiterate, remember, Micron has changed their business. It's no longer as cyclical of a business. 16 strategic customer agreements, 100 billion dollars in revenue associated with that. 22 billion has already been deposited with Micron. They're using that for, you know, fabrication capital expenditures for their own business to continue to grow it, things of this nature. And remember, in the macro case here, there's 5.5 trillion out there, 2030 forecast that should be spent on AI infrastructure buildout, and that's very, very relevant. Now, one of the thing that I saw coming out from Bank of America that's actually not represented in this infographic is that they targeted a AI infrastructure build-out north of 1.5 trillion dollars by the end of '27. I thought that was interesting. That's the one of the few times I've actually seen a number there cuz right now the number for the AI build-out, you know, kind of infrastructure enterprise spend for all of AI is is is climbing to and probably end about 750 billion dollars in '26 and now we're looking at a 1.5 trillion dollar spend coming in from for the end of '27. And again, that goes to the heart of CapEx expenditures, which I talk a lot about in my videos because CapEx expenditures are one of the things that Wall Street gets a little dicey about and everybody starts freaking out like they're you know, running around with their hair on fire when they every week somebody's there's some piece of news where everybody's freaking about about oh my CapEx expenditures are going to stop. No, they're really not. Okay, again, I want to reiterate that Bank of America has reiterated their buy, but I want to go back to 16 strategic customer agreements, 100 billion dollars allocated. Those are allocated dollars that contractually are there, okay? And the the AI spend is not going to slow down, but Wall Street wants you to think it is. They want to keep that uncertainty and that fear in your mind. Okay, so let's jump into this Bank of America bullish call on Micron reiterating a a buy. One of the first thing that's that's pillar to this or key to this is the 250 billion dollar US investment plan. So let's zoom in on that just a little bit here on the on the left-hand side. Let me move the picture of me, so there you go. On that that first column on the left, they're referencing the 250 billion dollar US investment plan that Micron is making into the US for different types of things. Right here you can see it's the expansion of memory fab facilities in Idaho and Clay, New York continued development of the mega semiconductor campus campus, excuse me, in Virginia additional investments to strengthen capacity. Okay? Uh three three billion dollar supply chain initiative, 10 year silicon wafer supply agreement with global wafers. Uh that's all part of that three billion dollar agreement, but Microsoft Micron is increasing its US investment to more than 250 billion through 2035 up from 200 billion. So, they're even allocating even more. Would you Do you think Micron would be doing this if they were worried about capex dollars slowing? No, they are building that fabrication infrastructure, those fabrication facilities to meet demand. And some people would stop me right there and go, "Well, Austin, if they if they if they meet demand and then they go past that demand supply, then we're going to have a glut of chips." Good point. Glad you talk Glad you raised it. That's simply not going to happen. Micron is going to manage this. They are going to just like SK Hynix, just like Samsung. They're all three combined controlling 90% of the entire memory market as it relates to the AI initiatives. Okay? So, I'm going to reiterate those numbers. Beyond that, Micron is not going to over It's not going to overbuild to put a glut of or a oversupply of memory chips on the street. Neither is SK Hynix and neither is Samsung. You want to know why? Price. They're rais They're raising their price, which is ultimately contributing to insane profits and ultimately driving higher earnings per share, raising the stock price and all those kind of things. Okay. So, middle column here, why Bank of America is so bullish. First, number one, AI spending is still accelerating. There's that number I was looking for it. Right at number one, BofA expects big tech companies to spend 1.5 trillion on AI and cloud infrastructure in 2027, 40 to 50% higher than expected spending this year. I just gave you that number. That number is going to come in at about 750 billion for 26, and memory is expected to capture 35 to 40% of that spending, making Micron a massive beneficiary. Guys, I could stop right there, and we could be done with the video, okay? Anytime you have that doubt, always come back to that. Come back to that CapEx expenditures are going to continue to go up, and this is Bank of America, their lead analyst talking about this and putting it front and center. So, the next time you see that article or that talking head on the financial network saying, "Well, CapEx expenditures are going to go away." Just kind of shake your head and walk out of the room. Seriously, okay? Or change the channel. Memory has become strategic number two. It is no longer a commodity. High-bandwidth memory, HBM, DRAM, and AI storage are now central components of AI systems. Arya believes this is the analytic analyst believes memory is evolving from a cyclical commodity to a strategic strategic can't talk AI enabler deserving higher valuation multiples. Point-blank. Again, we talked about the long-term customer agreements right here. There they are, okay? Big ones, GM, Ford, at least three or four of the hyperscalers not named in the customer service customer Excuse me, customer agreements, but we believe and know that they are there, okay? Some of the parts valuation, this is the very bottom one, number four. It's very interesting. This analyst values Micron by separating it into two components, traditional memory business valued at a price-to-book multiple, and the HBM business valued at a much richer earnings multiple. The purchase approach supports this $1,550 price target, okay? Interesting, right? Now, let's shift over to the far right column. Why the $250 billion investment matters that Micron is investing into the United States as far as their build-out plan? It signals confidence that the AI memory demand will remain elevated for years. Remember that plan from Micron goes through 2035. Right now, the road map that we can see for CapEx expenditures goes well past 2030 at about a $5.5 trillion on all of AI build-out spend by 2030, and the number by 2033 $7.5 trillion. That's what other companies, hyperscalers, big enterprise companies are going to be spending on AI. And again, Micron, SK Hynix, Samsung, they stand to value and benefit a lot from that. And I think Micron stands to benefit even more so because they are the only US-based memory manufacturer, essentially. SK Hynix is not. Samsung is not. Okay? Second thing, commitment to produce 40% of Micron's DRAM in the US over time. This This also, the $250 billion is spending in the United States, commitment to produce Excuse me, strengthens US supply chain security of national and semiconductor independence. We don't want to be dependent on fabrication facilities in other countries. Again, strengthens Micron's position and the fact that they have multiple locations, Idaho, New York, Virginia, all that kind of stuff. Micron will benefit from government contracts, as well as contracts from companies like General Motors and Ford. GM and Ford are putting Micron components into their products, their cars, their trucks. their their as part of these initiatives, American company to American company. I am not taking anything away from SK Hynix or Samsung, both great companies. I'm going to invest in SK Hynix whenever they come to the United States on tomorrow's Nasdaq listing. But, they're they're not mutually exclusive. Micron I like for its reasons, SK Hynix, if you're talking about just investment potential, you have to look at each one of them for its own value. Okay? Over here on the right, the $250 billion investment provides capacity support hyperscalers long-term AI infrastructure. The bottom line, B of A, Bank of America, Vivek Arya, believes the market is still pricing Micron as a cyclical memory company. I agree. While it increasingly resembles a long-duration AI infrastructure. Essentially, he's saying Micron should be put on the level of an AMD, an Nvidia, an Intel, but the market, Wall Street, still sees it as this old-school cyclical memory business that it used to be. And that's where Wall Street is getting it wrong, and that's why, again, I think the multiples are still low for Micron. Yeah. So, what do you think? Argue with me? Do you think I'm wrong? Do you think Vivek Arya is wrong? Bank of America with their their buy rating and reiterating their price target target of $1,550. I want to hear from you. Drop in the comments below. By the way, I am building a community here around Micron, AI, memory, SK Hynix, and keeping you up to date. I will also cover other sectors of the AI space, so please consider subscribing to the channel. Please like this video. It helps me grow the channel. I would truly appreciate it. So, thank you for giving me a few minutes, and let me know what you think. Do you think we're on to something here? I do. I think we're in the right place at the right time and I'm very very bullish on Micron and I'd love to hear from you as to what your thoughts are. Links are right down there. I'll see you in the next video. Take care.