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Micron Technology Inc. (MU - Analyst Report) seems well set on the growth path, given its positive earnings surprise history and strong fundamentals. That’s why the shares of this memory chipmaker soared 135.1% over the last one year and 34.1% year-to-date.

On an average, this Zacks Rank #1 (Strong Buy) stock’s earnings have outperformed the Zacks Consensus Estimate by 35.76% over the last four quarters, making investors bullish on the stock. Strong revenue growth (120.4% in first-quarter 2014 and 97.6% in second-quarter 2014) also kept investors interested in the stock.

The underlying driver is of course the favorable outlook for the memory market that bodes well for the company’s success.

The company is optimistic about supply/demand balance for DRAM and NAND memory chips in 2014, which should support prices. According to management, demand for DRAM and NAND is expected to increase in the mid 20% to 30% and high 30% to low 40% ranges, respectively, over the long term. We believe that this supply/demand scenario is a positive for the company.

Micron is expected to benefit from the strong demand for NAND flash-memory chips, used in smartphones and tablets. Driven by new tablet products and greater adoption of solid state drive (SSD), total demand in the NAND flash memory industry could surpass manufacturing capacity, leading to periodic shortage and higher pricing in the near term.

Furthermore, the Elpida acquisition has catapulted Micron to the 5th spot from the 10th in Gartner’s 2013 list of Top 10 Semiconductor Vendors by Revenue, Worldwide. This is because the Elpida acquisition expanded Micron’s wafer manufacturing capacity by approximately 45%. Moreover, the acquisition of Elpida has added Apple (AAPL - Analyst Report) to its customer roster, which is a positive for future growth. Going forward, the acquisitions of Rexchip and Elpida will benefit Micron’s share in the memory market.

Micron’s innovations in memory technologies, spanning DRAM, NAND and NOR Flash memory remain the growth catalysts, going forward. These are being widely used in the latest mobile computing devices as well as in consumer, networking and embedded products. Moreover, we remain optimistic on Micron’s SSD product launches that are in great demand for their advantages over the traditional hard drives.

While it may not be easy for Micron to take share from SanDisk Corp. (SNDK - Analyst Report) — a key player in the NAND segment, support from Apple and Intel Corp. (INTC - Analyst Report), its prime NAND customers, could ultimately turn the situation in Micron’s favor.

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