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Shares of Micron Technology (NASDAQ:MU) have climbed 59% over the last year,but one analyst still sees significant upside.

Rosenblatt Securities analyst Hans Mosesmann has a buy rating on the stock, with a $165 price target.That's 109% above the current quote. Mosesmann's stock ratings have a 71% success rate, according to TipRanks, so his calls are worth digging into.

Let's see what's driving Micron's business to determine whether the stock is worth buying today.

Image source: Getty Images.

Micron is one of the leading manufacturers of the dynamic random access memory (DRAM) products used in consumer PCs and mobile devices. Its products are increasingly being used in cloud servers, industrial, and other enterprise applications. DRAM makes up nearly three-quarters of Micron's total revenue.Micron is also a leading supplier of the non-volatile, rewriteable (NAND) storage products used in solid-state drives (SSDs), which make up 24% of the business.

Micron reported record revenue in the fiscal third quarter, with its top line advancing 36% year over year to $7.4 billion. But the key to Micron's business performance is pricing. It's operating in a nichewhere only a few manufacturers, most notably Samsung Electronicsand SK Hynix,compete to meet the demand in the marketplace. Thiscan sometimes cause swings in pricing when too much supply becomes available, and this situation can pressure profits.

Micron is currently experiencing an upswing in selling prices, however. In the recent quarter, Micron's gross margin improved significantly year over year, jumping nearly 10 percentage points to 42.1%. This is a result of DRAM average selling prices increasing by 20% quarter-over-quarter, reflecting a strong demand environment.

During the fiscal Q3 earnings call, CEO Sanjay Mehrotra provided more insights on Micron's near-term outlook for the supply and demand situation. Mehrotra cited "strong demand across almost all end markets," including PC, data center, smartphone, and 5G. Mehrotra said that Micron can't meet current demand in automotive, and also pointed to strong demand in industrial markets.

The semiconductor shortage is causing demand to exceed supply right now, and this could last into calendar year 2022.But even when the supply shortage is eventually resolved, that will push demand up even further, as Mehrotra explained.

For the fiscal fourth quarter, Micron expects revenue to increase sequentially to approximately $8.2 billion, with gross margin reaching 47%, plus or minus 1%. Management didn't provide guidance beyond the next quarter, but it expects pricing to remain tight into calendar year 2022. All of this points to rising demand and improving profitability for Micron's business.

MU data by YCharts.

The consensus analyst estimate has Micron's gross margin improving from 39% in fiscal 2021 to 50% next year.Based on analyst estimates, this would translate to earnings per share of $5.93 in fiscal 2021, with a significant jump to $11.36 in fiscal 2022.

For Micron's stock price to reach $165, it would have to trade at 14.5 times next year's earnings estimate. That's not asking too much when the stock currently sells for a modest 13.2 times the consensus estimate for fiscal 2021 earnings.

It's also important to know that Micron has met or exceeded the consensus earnings estimate for 12 straight quarters. Plus analyst estimates have been rising recently for revenue and earnings looking out to fiscal 2022 and fiscal 2023.This could mean that investors are still underestimating the strength of the demand trends for Micron's products.

Keep in mind that Micron has been a volatile stock in the past, but the company has delivered profitable growth, even if it has been lumpy. The stock has delivered a 950% return over the last 10 years, but given the swings in memory pricing that often occur, this is one stock you want to get right when you buy shares.

Given management's outlook that supply will remain tight into next year, the secular demand trends in 5G wireless and cloud servers, and the stock's low valuation, the chances are good that investors could double their money with this tech stock.

This article represents the opinion of the writer, who may disagree with the official recommendation position of a Motley Fool premium advisory service. Were motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Is Micron Technology Stock Headed to $165 a Share? - The Motley Fool

TOP 100: IBM makes big move toward transformation

A recurring theme that weve heard from companies on the 2021 Washington Technology Top 100 is transformation, both for themselves and for their customers.

But few companies can claim as a dramatic a transformation as the one happening at IBM, which is spinning off its managed infrastructure services business into a new $19 billion-annual revenue company to be called Kyndryl.

IBM will remain a $59 billion-annual revenue company focused on hybrid cloud adoption, digital transformation and other areas of innovation such as artificial intelligence-related solutions.

We are really returning to our roots as a core technology company, said Steve LaFleche, general manager for the U.S. public sector and federal market at Big Blue.

IBMs revenue today is about 65 percent services and 35 percent technology. ButLaFleche said that once Kyndryl is an independent company, IBMs revenue mix will flip to 65 percent technology and 35 percent services. The split is expected to happen by the end of this year.

For 2021, IBM is ranked No. 33 on the Top 100 with $1.1 billion in prime government contracts.

LaFleche said the split will have little impact on the federal business because most of the managed infrastructure business with public sector customers takes place in the state and local market.

A secondquestion that was top of mind going into our conversation was how does IBM distinguish between managed infrastructure services and its cloud offerings. Why dont they fit together?

LaFleche said it's rather simple: think of the managed infrastructure services as the people who run data centers and network operations, which makes it about hourly rates.

IBMs focus is on our hybrid cloud platform, LaFleche said. The software platform, some of the underlying integrated hardware that enables clients to modernize. Well keep that as part of IBM.

The company has positioned itself to help customers accelerate their digital transformation journeys, modernize applications and implement intelligent workflows.

We will not be running data centers or networks or storage farms or any clients on-premise infrastructure, LaFleche said.

Big Blue's journey began several years ago and can be tracked through the kinds of acquisitions it has made. Topping that list of course is the $34 billion acquisition of Red Hat in 2019. Much of IBMs hybrid cloud strategy is built around Red Hats Open Shift offering.

That is the foundation of our open hybrid cloud platform, LaFleche said. From there the company has invested in its software stack that sits on top of that platform and the company is retooling its services business to focus on accelerate adoption of the cloud platform.

Big Blue is also incorporating Open Shift into its System Z mainframes and IBM Power Servers.

This will better enable our clients to move to this open hybrid cloud world that we see as the predominant architecture for the foreseeable future, LaFleche said.

The opportunity is huge in the federal space because parts of many agencies are moving to a hybrid cloud environment, but the majority have not. Much work remains to be done.

IBM wants to help federal customers keep what they need on-premise in a private cloud but at the same time help them move what they can to a public cloud. This will be particularly important as agencies add mobile front ends to systems and improve how they interact with citizens.

Those kinds of moves require a hybrid cloud approach, according to LeFleche.

And IBMs strength is really in that hybrid multi-cloud arena, LaFleche added.

Earlier this year, IBM won an $850 million Navy contract for enterprise resource planning support services. That is an example of the kind of opportunities IBM is pursuing in the federal space. The contract is known as NETSS, short for Navy ERP Technical Support Services. It consolidates several existing contracts.

Thats exactly the type of work we want to see, LaFleche said. Anything that involves applications and application modernization and moving those applications forward.

Outside of Red Hat, many of IBM's other acquisitions have brought in capabilities such as Taos in the United States and NordCloud in Europe. Those deals happened earlier this year and focused on hybrid cloud consulting.

These companies are services companies that help clients modernize applications, move them to a hybrid cloud in an open way, LaFleche said. So they can run on IBMs cloud, Google Cloud, Amazon Web Services, Microsoft Azure. Its very agnostic.

Earlier this month, IBM acquired a DevOps consultancy and enterprise Kubernetes certified service provider. That deal for BoxBoat extends IBMs container capabilities, which are critical to a hybrid cloud implementation.

While its acquisition strategy moves forward, IBMs partnering strategy has evolved as well. IBM has forged relationships with AWS, Microsoft Azure and Google. Big Blue also partners with Workday, Salesforce and Palantir.

We have embraced a broad ecosystem but with a common mission -- we want to help drive this open hybrid cloud platform. Were not just partnering for empty calories, LaFleche said.

The pace of modernization and digital transformation is picking up in the government market. Part of that is driven by the COVID-19 pandemic which forced agencies to work remotely. Now they see a real benefit of a flexible workforce whether there is a pandemic or not, LaFleche said.

Theres a big pull in the marketplace and the technology is there and the skills to modernize these applications are there, LaFleche said. We are at a moment of time where everybody says, its time to go.

Posted by Nick Wakeman on Jul 16, 2021 at 12:42 PM

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TOP 100: IBM makes big move toward transformation - Washington Technology

Platform as a Service (PaaS) is software that enables third-party service providers to provide platforms to their customers and develop, run, and manage software applications without having to build and maintain the underlying infrastructure themselves. It is a development enabler.

Most platforms as a service include templates or build packs. opinion How to build a particular type of application is usually centered around the popular ones. 12-element methodology.. This is why PaaS options are often labeled as opinion and are ideal for new greenfield applications.

Appearance of Cloud computing Companies such as Amazon Web Services, Microsoft, and Google put together the key components needed to launch an application on their own platform, with a single command or mouse click on the code.

This simplification makes software development faster and easier, and hides the underlying compute, storage, database, operating system, and network resources needed to run applications, thus increasing the scope of the developers work. It will be reduced. PaaS providers charge for the use of these resources, and in some cases for the use of the platform itself, by the number of applications per user (or seat) or hosted.

Like other cloud services such as Infrastructure as a Service (IaaS) And Software as a Service (SaaS), PaaS is typically accessed over the Internet, but can also be deployed in on-premises or hybrid mode. In any case, the underlying infrastructure on which the application runs is managed by the service provider. In many cases, customers can decide where to physically host their applications and choose the performance or safety of their environment. Often there are additional costs.

The components of a typical PaaS are:

For many, the PaaS and IaaS debate is settled by the market, but the decision to use the underlying building block itself (IaaS) or the opinionable PaaS is to pursue speed. It is a decision that many people make today. Application to the market.

As with any other case of software development, this decision comes with trade-offs and depends on what your organization is trying to achieve.

One of the biggest benefits of using PaaS is the ability to quickly create and deploy applications. You dont have to take the hassle to set up and maintain the environment in which your application runs. This, in theory, allows developers to deploy faster and more regularly, allowing them to focus on differentiators rather than solving problems such as infrastructure provisioning.

PaaS is maintained by the service provider and comes with service level agreements and other guarantees, so developers dont have to worry about cumbersome and repetitive tasks such as patching and upgrading, ensuring the availability and stability of their environment. I can be sure it is expensive. , Although the outage still occurs.

PaaS can also be a convenient gateway to new things Cloud-native development method Program a language without up-front investment to build a new environment

Most of the risks associated with using PaaS result in a loss of control that professional developers must tolerate by handing over their applications to third-party providers. These risks include information security and data resident concerns, fear of vendor lock-in, and unplanned outages.

With PaaS, some team members may find it confusing because developers have a limited range of changes to their development environment. Failure to change the environment or deploy feature requirements by service providers can lead to enterprises. Build your own internal developer platform beyond PaaS..

So Benkepes wrote for Computerworld in 2017, PaaS is widely embedded in container management and automation ideas, and major providers such as Red Hat, VMware, and Big Three cloud providers are properly pivoting towards facilitating container adoption. Kubernetes in recent years.

That doesnt mean PaaS is deadInevitably, that PaaS has evolved as the industry has made widespread migration to containerized applications coordinated by Kubernetes. There is always a market that simplifies software development, but the underlying platforms for doing so are changing over time.

PaaS example

Some of the major PaaS providers include: Amazon web services (AWS), Google Cloud, Microsoft Azure, Red Hat, and Salesforce Heroku..

Big three cloud providers on AWS, Microsoft Azure, and Google Cloud have all made significant investments over the last decade to facilitate adoption of their services, integrating their own cloud components to facilitate adoption.

The major PaaS options still on the market include:

One of the first PaaS options, AWS Elastic Beanstalk, enables rapid deployment and management of cloud applications without having to learn about the underlying infrastructure. Elastic Beanstalk handles capacity provisioning, load balancing, scaling, and application health monitoring details automatically.

Cloud Foundry is an open source PaaS managed by the Cloud Foundry Foundation (CFF). Originally developed by VMware, it was transferred to Pivotal Software, a joint venture between EMC, VMware and General Electric, and then to CFF in 2015. Like OpenShift, Cloud Foundry is designed to build and run container-based applications. Kubernetes For orchestration.

Google App Engine is a PaaS offering for developing and hosting web applications in Google-managed data centers. Applications are sandboxed, run, and automatically scaled across multiple servers.

Microsoft Azure App Service is a fully managed PaaS that combines various Azure services on a single platform.

Red Hat OpenShift is a family of PaaS offerings that you can host or deploy on-premises in the cloud to build and deploy containerized applications. The flagship product is the OpenShift Container Platform. It is an on-premises PaaS built on Red Hat Enterprise Linux and built around a Docker container orchestrated and managed by Kubernetes.

Early very beloved PaaS, Heroku may have gone astray Since being acquired by SaaS giant Salesforce in 2010, Heroku has been part of a wide range of Salesforce platforms for developer tools, supporting a wide range of languages and thousands of developers running applications on them. I will. In fact, to use Heroku, you need to build a common runtime deployed in a virtualized Linux container. Dynos, As Heroku calls them, its spread across the dyno grid on AWS servers.

Platform as a Service has matured into its own important cloud service category, but containers (and Managed Container-as-a-Service (CaaS) option Developed by major vendors), Serverless computing,and Function as a service (FaaS) optionOffers many of the same benefits as PaaS, but for portability, flexibility, and serverless computing, it promises an environment where you pay only for what you use.

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PaaS Rating: An Easier Way to Build Software Applications - Illinoisnewstoday.com