Goldman loves this chip stock ahead of earnings results next week, sees 20% upside

Goldman Sachs is optimistic on Micron Technology stock ahead of quarterly results. The firm reiterated a buy rating on the chipmaker's stock in a Tuesday note, accompanied by a $85 per share price target. Goldman's forecast implies roughly 21% upside from Monday's $70.50 close. Micron stock has added nearly 41% from the start of the year. MU YTD mountain Micron Technology stock.

"[W]e expect the combination of improving demand trends and disciplined supply to drive higher pricing, improving margins/EPS and, in turn, sustained stock price outperformance over the coming quarters," Hari said. And while a downturn in memory stocks sheds some doubt on the future of stock outperformance in the sector, "overall DRAM [direct random access memory] industry fundamentals will return to a positive trajectory on a through-cycle basis," Hari said.

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