Micron Technology emerged as one of the most overbought stocks this week as the stock market hit record highs. Stocks ended the week higher, with all three major market averages setting new intraday and closing records on Friday, boosted by gains in the technology sector and optimism about extending the ceasefire in the Middle East. Investors showed some special love to some individual stocks this week, pushing them into overbought territory. CNBC Pro used a stock screening tool to identify such stocks based on their 14-day relative strength index (RSI). A stock with a 14-day RSI above 70 is considered overbought and a decline may be imminent. Conversely, a value below 30 indicates that the stock is oversold and could bounce back soon. The following table shows the most overbought stocks this week. Insatiable demand for Micron’s memory chips in artificial intelligence applications has pushed the company’s stock price up 29% this week. On Tuesday, Micron’s market capitalization topped $1 trillion for the first time. Micron shares rose after UBS raised its price target on the stock to $1,625. At the time, the stock was selling for less than half that amount. Based on Micron’s Friday closing price, the revised price forecast suggests an additional 67% upside going forward. “As more details emerge about the structural changes AI is bringing to the entire memory complex, we believe the market will begin to price the stock at more ‘normal’ multiples and MU will continue to revalue,” UBS analyst Timothy Arcuri said in a note to clients. Micron’s RSI was 78 at the end of the week. Investors also flocked to fellow chipmaker Advanced Micro Devices, which ended the week up 10% on an RSI of 77. This week’s big winner, Dell Technologies, closed with an RSI of 90 after its stock soared 33% on Friday. Dell, a maker of servers used in AI data centers, ended the week up 43%. On Thursday, Dell raised its full-year outlook after its first-quarter sales and profits exploded, easily beating analysts’ expectations. Friday’s rally alone marked Dell’s biggest single-day gain ever. Dell reported revenue of $43.84 billion, beating the $35.43 billion expected by analysts surveyed by LSEG. Revenues increased approximately 88% year-over-year, marking Dell’s fastest revenue growth rate since returning to the public market in late 2018. Following the blockbuster report, several Wall Street analysts became more bullish on AI infrastructure stocks. Barclays analyst Tim Long reiterated his overweight rating but raised his price target to $550, suggesting Dell could rise another 31% from Friday’s closing price. “Despite supply chain constraints, DELL outperformed in all business areas…We have a more positive view of DELL given its strong AI server orders, stable AI (operating) margins, expanding opportunities in enterprise servers and storage, and DELL’s consistent and disciplined (operating spend) management,” Long wrote. Ford Motor also turned out to be overbought with an RSI of 80. The iconic maker of F-Series pickup trucks soared 17% during the holiday-shortened week. “We believe F Company’s recent gains are a result of increased investor optimism about the company’s battery energy storage system products,” Bank of America analyst Alexander Perry said Friday. “We believe investor sentiment was beginning to change prior to the recent Ford Energy optimism.” “We’re seeing increased interest only from long-term investors who recognize that they’re playing in the right North American profit pool.” Perry reiterated his buy rating on Ford and raised his 12-month price target to $20 from $17, representing an additional 15% upside.
