Analysts Declare it’s Prime Time to Buy, According to Recent Reports

After a buoyant first half of 2021, the stock market has been experiencing a downward spiral in the past few weeks, giving investors a taste of gravity. The sudden slump can be attributed to a combination of bleak job statistics and a rise in Japan’s interest rates. Some of the key tech players, such as NVIDIA Corporation, have also been experiencing a softening trend since June.

However, one must remember that widespread market selloffs often present lucrative opportunities. When a benchmark index like the S&P 500 plunges by 10% within a span of three weeks, most stocks will feel the heat, regardless of their prior strong performance.

Micron: From Chart-Topper to Underperformer

One such notable case is semiconductor industry leader Micron Technology. The company, headquartered in Idaho, had logged nearly 100% gains until mid-June. However, by the last week, it lost almost 45% of that cumulative gain.

Most of Micron’s losses have occurred since the second half of July, coinciding with the downtrend in the S&P 500. Yet, there are strong indications that Micron’s dip is exaggerated and could present an excellent entry point for investors.

The Financial Muscle of Micron

Consider Micron’s solid fundamentals, to begin with. The company’s earnings in June took analysts by surprise, with the top-line earnings surpassing expectations by 29%, and bottom-line revenue also solidly beating anticipations. This data marked Micron’s highest revenue in two years and the first back-to-back profitable quarters since late 2022.

These encouraging financial results, amid market sentiment shifts and rising interest rates, make Micron’s shares seem like a bargain. Their value has returned to the 2021 levels, representing a unique buying opportunity.

Micron’s RSI: A Go-to Market Timing Tool

In addition to the company’s fundamentals, the stock’s technicals are also quite appealing, especially its Relative Strength Index (RSI). The RSI, a favorite among traders, indicates how oversold or overbought a stock is by considering its trading history, typically over the past 14 days.

In the case of Micron, the RSI hit 25 last Wednesday, its lowest in the past three years. This low level suggests that the stock is highly oversold and possibly nearing its bottom. Hence, timing your entry using such an extremely low RSI reading can prove to be a smart move.

After hitting this low, Micron’s shares have since recorded three consecutive days of gains and have risen nearly 10%.

Bullish Analysts Fuel Optimism for Micron

Last week, KeyCorp reiterated its Overweight rating on Micron shares and gave them a refreshed price target of $145. Given that the stock closed below $95 on Monday evening, this suggests a substantial upside of more than 50%.

Citigroup is also banking on Micron, highlighting it as their top pick for the remainder of the year. The firm expressed confidence toward the broader semiconductor industry, anticipating no slowdown in expenditure on AI or memory.

To gut-check their bold call amid a sell-off environment, you could look at Micron’s robust fundamentals and technicals. Taking these into account, the recent confidence by such prominent analysts could be a well-informed move.

However, while being bullish on Micron Technology is justified, every investor should research and analyze other promising stocks, as well. Top-rated analysts believe there are other stocks that could yield better returns.

To sum up, Micron’s strong fundamentals, appealing technicals, and optimistic analyst forecasts indicate that the stock could be a great addition to an investment portfolio. Despite the recent market downturn, Micron’s future prospects look promising, making it a potentially lucrative opportunity for savvy investors.

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