Strong Revenue, Forecast Fuel Micron Stock Rally

Options volume is today running at 10 times the intraday average

Digital Content Manager
Dec 21, 2023 at 10:47 AM
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The final quarterly reports of 2023 are trickling in, with chip name Micron Technology Inc (NASDAQ:MU) among the latest to enter the confessional. The company yesterday announced smaller-than-expected fiscal first-quarter losses of 95 cents per share, while revenue beat analysts' expectations.

Micron's fiscal second-quarter revenue forecast came in above estimates as well, as demand for its flash storage and dynamic random access memory (DRAM) chips improves, and supplies near normal levels.

At least 15 brokerages have raised their price objectives in response, with Rosenblatt Securities hiking from $100 to $140. This is particularly noteworthy since most analysts are already bullish on MU, with 22 of 26 in coverage calling it a "buy" or better, while the 12-month consensus target price of $92.74 is a 9.4% premium to current levels.

Options traders are also chiming in, with 146,000 calls and 86,000 puts traded so far, which is 10 times the intraday average volume. The weekly 12/22 85-strike call is the most popular by far, followed by the 90-strike call in that series, with positions being opened at both.

Micron Technology stock sports a 10-day call/put volume ratio of 1.70 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands in the 80th percentile of annual readings. This suggests options traders have been more bullish than usual in the last two weeks. 

MU was last seen up 6.5% at $83.81, and earlier surged to its highest level since March 2022. The 180-day moving average has contained several pullbacks in the past year, and the security is now on track for its best day since April. For 2023, Micron Technology stock has amassed a 69.3% lead.


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