Micron Stock Jumps on Analyst Optimism; Options Market Buzz Ahead of Earnings

Micron Technology's stock has surged ahead of its earnings report, with analysts overwhelmingly bullish on the chipmaker's prospects. As of Tuesday, 15 out of 16 analysts tracked by Visible Alpha have a "buy" or equivalent rating for Micron, with a consensus price target of roughly $142, a 40% premium over Friday's closing price of $102.50. Wall Street expects Micron to report revenue of $8.72 billion, 84% higher year-over-year, and for the company to swing to a profit of $1.84 billion or $1.58 per share, compared to a loss of $1.23 billion or $1.12 per share a year earlier.

The results come about a week after Micron was awarded a federal grant of up to $6.165 billion to make semiconductors in the U.S. as part of the CHIPS and Science Act of 2022. The Commerce Department said the money would support Micron’s “two-decade vision” to invest approximately $100 billion in New York state and $25 billion in Idaho for new factories that will create about 20,000 jobs. Shares of Micron rose over 4% Friday and have gained about 20% since the start of the year.



The options market has also been buzzing with activity ahead of Micron's earnings report. Traders have been betting on the stock's upside potential, with options volumes surging and implied volatility increasing. This reflects the market's anticipation of potential earnings surprises or market movements.



The surge in options activity and implied volatility can be attributed to several factors. Analyst optimism, strong earnings expectations, positive news regarding the federal grant, interest in the company's high-bandwidth memory chips, and the market's anticipation of uncertainty have all contributed to the bullish sentiment in the options market.

In summary, Micron Technology's stock has jumped on analyst optimism ahead of its earnings report, with the options market also reflecting bullish sentiment. The company's strong fundamentals, growth prospects, and the positive impact of the federal grant have driven this optimism. As investors await the earnings report, the options market is pricing in the uncertainty surrounding Micron's earnings and the broader market conditions.