Melius Research analyst Ben Reitzes predicts the rally in chip stocks to continue, driven by strong demand for artificial intelligence infrastructure and sustained spending.
The analyst is especially bullish on Micron Technology Inc. (NASDAQ:MU), SanDisk Corp. (NASDAQ:SNDK) and Intel Corp. (NASDAQ:INTC). He raised the target price on the three stocks, arguing that newly signed long-term agreements are making the companies’ results easier to forecast in a historically volatile corner of tech.
Speaking on SquawkCNBC Monday, Reitzes said, “We just took our targets up on Micron and SanDisk and Intel the most in our group.” “They are signing these long-term agreements that make them more predictable and I think they get recognized for it.”
The analyst argued that as AI-driven demand keeps creating supply bottlenecks, allowing chipmakers, including Micron, SanDisk, and Intel, to capture more market value than traditional software companies or non-chip “Magnificent Seven” names.
Micron
Micron has been the most crowded trade on Wall Street in recent weeks. The stock surged about 139% since the start of the year, lifting the memory chipmaker’s market capitalization to nearly $900 billion.
Reitzes set a new Street high target of $1,100, up from the previous projection of $700, indicating confidence in the memory and AI semiconductor market resilience.
Bank of America lifted the price target on the stock to $950 from $500, citing a growing confidence in the memory market.
Benzinga Edge Stock Rankings indicate that MU has a Momentum score in the 99th percentile. It maintains a strong price trend in the short, medium and long term.
SanDisk
This memory chipmaker is also witnessing one of the best bull runs on Wall Street this year, soaring more than 460% this year, driven by rising storage demand. The rally has propelled its market capitalization to $197 billion.
Reitzes raised the target price to $2,350 from $1,500 for SanDisk, according to the report.
SanDisk has emerged as the purest way to play the storage shortage triggered by AI workloads, and Wall Street is treating it accordingly.
Benzinga Edge Stock Rankings indicate that SanDisk has a Momentum score in the 100th percentile. It maintains a strong price trend in the short, medium and long term.
Intel
Intel is on a tear this year with more than 193% gains driven by the shift toward “agentic” AI. Reitzes increased the target price from $100 to $150 on the stock.
The Founder of Niles Investment Management, Dan Niles, highlighted that the chipmaker is poised for significant growth driven by the emerging demand for “Agentic AI,” which requires a more balanced ratio of CPUs to GPUs.
Intel CEO Lip-Bu Tan stated, “The next wave of AI will bring intelligence closer to the end user, moving from foundational models to inference to agentic. This shift is significantly increasing the need for Intel’s CPUs.”
Benzinga Edge Stock Rankings indicate that Intel has a Momentum score in the 99th percentile. It maintains a strong price trend in the short, medium and long term.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by a Benzinga editor.
Photo courtesy: jejim from Shutterstock
Recent Comments