By Mackenzie Tatananni

Micron Technology stock is the top performer in the S&P 500 this year, and while analysts are generally optimistic about its performance, some have lingering doubts.

Shares of the memory and storage company were up over 18% this year through Wednesday's close, while the index itself had gained only 0.6%.

The stock rose 2.7% to $101.91 on Monday after Nvidia CEO Jensen Huang said that Micron was providing memory for the graphics-processing units of the company's RTX 50 videogame chips.

The mean rating on the stock among the nearly 30 analysts tracked by FactSet who follow the company is Overweight. The average price target is $131.47.

The biggest bull is Rosenblatt Securities analyst Hans Mosesmann, with a Buy rating and $250 price target on the shares.

Mosesmann's enthusiasm is nothing new. He reiterated a $225 price target in June, saying Micron was set to capitalize on "one of the largest memory cycles in history."

Micron was also included in New Street Research's tech stock picks for 2025. Analyst Pierre Ferragu argued that the company will easily surpass expectations this year, noting that high-bandwidth memory (HBM) and dynamic random access memory, two products Micron makes, are critical components for artificial-intelligence systems.

Other analysts are more hesitant heading into 2025. Last month, Bank of America lowered its rating on the stock to Neutral from Buy and cut its target for the price to $110 from $125.

The analysts said their earnings estimates were already below the Wall Street consensus ahead of Micron's latest report, but they decided to reduce them again because they expected gross margins to stay weak in the coming quarters.

Weakness in PC and phone markets was "putting downward pressure on memory pricing" despite favorable trends in HBM and data-center demand, the analysts wrote.

While they are still positive about Micron's position in the HBM and AI markets, the stock has historically struggled to outperform when gross margin expansion has remained muted, the analysts said.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

January 09, 2025 11:48 ET (16:48 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.