Joseph Moore of Morgan Stanley (NYSE:$MS) implied that, over the next year, Micron Technology (NASDAQ:$MU) should be able to hit what was once considered an optimistic $36 per share value. 

Much like the oil and gas sector, Micron’s stock reflects the dance between supply and demand. While cloud participants are anticipating a tight but growing supply, the usage of mobile DRAM in 4Q will continue to rise. Similarly, it’s important to look back on what happened with oil and gas stocks when supply increased drastically; the stocks crashed. The same rule of surplus supply could apply to Micron. But for now, MU stock has risen 5% as a result of rising DRAM prices.

What Next?

Micron’s stock is somewhat undervalued. Let’s look at a comparison. At the end of July, Micron experienced a cash return of 2.7%. It’s now 2.4%. Intel Corporation (NASDAQ:$INTC), on the other hand, went from 7.0% to 7.2% in cash return. This means that Intel’s value has gotten cheaper while Micron has gotten more expensive.

MU Stock’s Optimistic $36

As of today, Micron’s stock price is a mere 18.5% below Morgan Stanley’s target. In the trading days from August 14-18, MU stock experienced 8.5% appreciation. Investors should heed the volatility of MU stock with some appreciation. Why? While server and specialty applications create majority of DRAM sales, solid state drives (SSDS), and automotive/industrial sector create 40% of NAND revenues. This will propel a unit base demand that will alleviate the volatility of current Micron earnings. Further down the line, from an industrial perspective, Micron reveals true potential for growth.

Sit Back

While MU Stock’s $36 is optimistically feasible, it is too soon to reveal a guarantee on increased value of shares in a year from now to investors. However, with Micron’s utmost confidence in its memory and storage potential, and its investment in doubling its cleanroom space, interests are sparks and remain high.

So, the bottom line is, if you’re looking for a short-term return, maybe hold off. If you’re in for the long haul, $36 within the upcoming year is within arms reach for MU stock.

Featured Image: twitter