Micron Jumps 12.78% on Dip Buying; Goldman Favors Samsung, SK Hynix

Micron Technology shares jumped more than 12% in intraday trading as investors bought the recent selloff. Goldman Sachs said Micron's investment appeal has improved, but it still prefers Samsung Electronics Co. and SK Hynix Inc. in the memory sector.

Barron's reported on Nov. 11 that Micron was trading at $817.81 as of 2:58 p.m., up 12.78% from the previous session. The stock had fallen 21% over the past month, prompting buyers to view the drop as overdone.

A key factor weighing on the stock had been concern over a slowdown in AI data-center investment. Investors have grown wary that growth in AI infrastructure spending, which has driven memory demand, could moderate.

James Schneider, an analyst at Goldman Sachs, maintained a Neutral rating on Micron and kept his price target at $1,250. He said the stock's risk-reward profile is improving on expectations for solid free cash flow over the next several quarters.

Still, Goldman sees Samsung Electronics and SK Hynix as more attractive on a relative valuation basis. Schneider said price-to-book ratios based on tangible book value are more appropriate than price-to-earnings ratios for valuing memory companies.

According to Goldman Sachs, Micron is trading at about 5.4 times tangible book value. Samsung Electronics and SK Hynix trade at lower multiples, giving them stronger relative valuation appeal.