(Reuters) - Shares of Micron Technology Inc (MU.O) gained 7 percent on Tuesday and were the most traded stock on Wall Street, a day after the chipmaker said it would buy back up to $10 billion of its shares.
The buyback, announced during company’s analyst day, helped add nearly $5 billion to Micron’s market capitalization.
“Micron executed one of its best investor days we can remember by cementing the case of the structural change in the memory/storage industry,” Rosenblatt Securities analyst Hans Mosesmann wrote.
At least seven analysts raised their price targets on the stock after the memory chipmaker announced its biggest ever buyback, worth about 16 percent of the company’s market value of about $64 billion.
The move follows the company’s newly announced plans to return at least 50 percent of free cash flow to stockholders starting next year.
Separately, the company announced a deal with Intel Corp (INTC.O) to produce and ship the world’s highest-density 3D NAND flash memory chip.
“Micron laid out the case that its business is strong and getting stronger as the demand for memory continues to expand, particularly as we enter a new age of AI,” Barclays analyst Blayne Curtis wrote in a client note.
At a median price target of $73.00, analysts expect nearly 23 percent upside to Micron which was last up 7.1 percent at $59.40 in late morning trading in New York.
Reporting by Sonam Rai and Munsif Vengattil in Bengaluru; Editing by Shailesh Kuber