Micron (NASDAQ: MU) stock jumped nearly 5% in early trading Monday, before retreating to about a 1.8% gain as of 10:10 a.m. ET.

You can thank investment banker Stifel for that.

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Image source: Micron.

Stifel loves Micron stock

Stifel analyst Brian Chin reiterated his buy rating and his $1,500 price target on Micron this morning, as StreetInsider.com reports.

With barely a week left to go before Micron reports Q4 earnings (on Sept. 30), Chin took a look ahead today to see how the maker of semiconductor memory chips might fare. On average, Wall Street analysts predict Micron will grow sales by 350% to $51 billion, with earnings growing 10x -- $31.35 per share. Chin doesn't necessarily disagree with these numbers -- and thinks Micron might even beat them -- but he warns investors to start preparing to see Micron report "more measured rate-of-upside than in recent quarters." Which is to say, earnings beats, but smaller beats than you may have come to expect.

What it means for Micron stock

More of Micron's revenue is coming from supply agreements with locked-in pricing these days. That makes the numbers still big -- but more predictable, and less likely to surprise to the upside.

Still, the AI revolution is in full swing and "the durability of this memory upcycle continues to be under-appreciated," says the analyst. DRAM and HBM markets remain undersupplied, and Chin thinks it's not unreasonable to expect 15% to 20% growth in chip volume through 2027, with profit margins continuing to trend higher besides.

Given all this, Micron stock at less than 23x earnings, and anticipating triple-digit earnings growth over the next five years, still looks like a buy to me.

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