Micron Technology stock has 30% upside potential, according to one Wall Street analyst.

micron technology (MU -3.16%) Stocks are in red — stock price performance is more than 2x S&P500 Investors have been betting for the past year that Micron's high-bandwidth memory (HBM) chips will prove essential to continuing the artificial intelligence revolution.

One analyst who is particularly optimistic about Micron's prospects is Wolf Research's Chris Caso. Mr. Caso on Wednesday raised his price target for Micron to $120 per share, suggesting the stock could rise more than 30% over the next 12 months or so.

Is Micron stock a buy?

Historically, Micron stock has traded at about 11 times its average earnings, an appropriately conservative price tag for a cyclical stock that grows rapidly during healthy semiconductor cycles but loses large amounts of money during recessions. It's the magnification. Caso said Micron's earnings per share could be close to $8.40 next year, by then surpassing its previous record of $11.51 per share, set in 2018. should be valued at nearly 14 times expected earnings in 2025. This revenue cycle reaches its peak.

But is it realistic?

Micron lost money last year. We are likely to be in the red again this year. Looking forward, most analysts see the current cycle peaking in his 2026, and Micron has yet to reach his earnings per share of $7 (up to $12). (Not even close!)

Mr. Caso's forecast is a significant outlier, and he fully takes into account the risk that rivals with larger size and market share could undermine the company on price and its ability to take full advantage of this growing market. I'm not sure if it is.both from korea SK Hynix and samsung After all, it is several times larger than HBM's Micron. and Both companies are expected to be profitable this year, but Micron is lagging behind.

While it's certainly possible for Micron stock to reach $120, I don't take this price target for granted. Micron's price ($7 per share), which trades at 11 times the best earnings estimates of other companies, makes this stock a safer target to buy.