Micron Technology Inc.'s (MU) valuation is untenable, according to Morgan Stanley. 

Micron shares were falling 5.8% to $58.96 on Thursday after Morgan Stanley analyst Joseph Moore downgraded the stock to equal weight from overweight based on valuation. Moore reiterated his price target to $65 a share, representing 4% upside from the stock's close on Wednesday, May 31. 

The firm lauded Micron's memory chip business, but the fact that the stock has jumped 40% in just three weeks has Moore spooked and said he sees "storm clouds on the horizon." Micron shares have risen 92% in just 12 months, compared to a 12% increase for the S&P 500 over the same time period.

"After being bullish on memory for the last two years, we are moving to a neutral stance. DRAM remains strong but looks priced in as MU is very close to our PT," Joseph Moore said Thursday. "We would rather err on the side of caution in an environment where we can see storm clouds on the horizon."

Instead, investors looking to jump into the NAND chip space should look at Western Digital Corp. (WDC)  , Moore said. Moore also wrote that he would look to buy if there is any weakness in softer second-half pricing.