Investors With A Healthy Risk Appetite Should Be Buying Micron

Shares of Micron Technology, Inc. MU were trading higher by more than 5 percent early Wednesday morning and are now flirting with the stock's 52-week high of $36.60. The company reported Tuesday its fiscal fourth quarter results, which came in above consensus estimates and solidifies the case for continuing to own the stock, according to Morgan Stanley's Joseph Moore.

Moore maintains an Overweight rating on Micron's stock with a price target boosted from $36 to $39 after the company reported a "another very robust quarter." The earnings report was boosted by the ongoing "exceptional" memory environment and supply growth.

In fact, the memory cycle will likely remain "stronger for longer" as the higher rate of NAND spending will result in supply acceleration as there is a large amount of planar NAND being converted to DRAM next year, the analyst continued. Also, the market is signaling that a DRAM shortage is "intensifying" with tight supply conditions across end markets, especially mobile.

Finally, during times of strength, Micron's stock could trade above its through cycle earnings power, which equates to the analyst's bull case scenario of $48 per share (10x EPS of $4.80). While it is unlikely for the stock to get to this level right away, it can nevertheless add around one multiple point each quarter.

At time of publication, shares of Micron were up 7.24 percent at $36.66.

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