Micron’s stock could wield 40% upside — even though earnings may not be a driver.

A Wolfe analyst doesn’t think next week’s earnings report will prove a ‘meaningful catalyst’ for Micron shares. He’s more enthused about earnings power over the medium term.

Micron Technology Inc.’s earnings reports usually garner a fair bit of attention because the company posts its numbers so late in the cycle, offering a fresh glimpse at the technology landscape during a fairly barren week.

But the memory-chip company’s results, due out next week, should garner even more eyeballs in light of the stock’s recent moves. While Micron shares MU, -3.22% charged up 22% in the month through Tuesday, they’re on track to fall for the second session in a row as investors pull back on momentum-oriented artificial-intelligence plays.

The question is how much earnings will matter, given that Micron has already proven itself an AI beneficiary and seen a 63% boost in its share price so far this year.

"While our revised estimates for [calendar years 2024 and 2025] reflect strong near term conditions, we don’t think that’s terribly surprising at the moment with elevated expectations, and therefore we aren’t expecting earnings to be a meaningful catalyst,” Wolfe Research analyst Chris Caso wrote in a note to clients Friday.

Still, Caso is quite bullish on the stock, with his $200 price target — up from $150 before — implying 44% upside from current levels. Caso’s optimism stems more from the medium-term picture as he looks at the earnings potential for calendar years 2025 and 2026.

His estimates “can drive a plausible case to $20” in earnings per share, with high-bandwidth memory causing a $3 “direct impact” to that. A tightening of HBM supply could positively impact prices for dynamic random-access memory and help earnings even more, Caso said.

“The plausibility of that scenario is what keeps us bullish on [Micron’s] stock despite its recent run,” he wrote.

Raymond James analyst Srini Pajjuri chimed in that Micron’s fundamentals look “strong enough” even though the stock has a rich valuation.

“We are looking for a beat-and-raise on pricing strength, which we think will more than offset the volume impact from Taiwan earthquake [in April 2024],” he wrote ahead of the earnings report. Pajjuri boosted his target price to $160 from $130.

Despite recent optimism from Wall Street analysts, Micron shares are under pressure in Friday trading, down 3.6% as the second-worst performer in the S&P 500 SPX on the day.