Micron Technology (NASDAQ:MU) shares rose more than 2% pre-market today after Morgan Stanley analysts upgraded the company to Equalweight from Underweight and raised their price target to $130 from $98.

The analysts commented that although they still view Micron as fundamentally overvalued based on long-term discounted cash flow (DCF) metrics, the continued demand for high bandwidth memory (HBM) is boosting sentiment among memory buyers, resulting in sustained pricing strength.

The analysts also mentioned the possibility of a positive preannouncement this quarter. While there may eventually be an oversupply of HBM, the market is currently in the ramp-up phase. Additionally, the analysts are increasingly optimistic about NAND due to the lack of spending, which they expect to be a significant driver next year.

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