Opinions
Kim Bolton
Micron Technology
MU-Q
SELL
Oct 23, 2024
Stock price when the opinion was issued
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The memory market is much more cyclical than other sectors of tech. MU is expected to see massive growth in 2025 (based on EPS consensus) but recent downgrades have caused investors to question this growth. The balance sheet and cash flow remain fine, and generally we like the company. On 2024 earnings it is quite expensive, but VERY cheap IF it can actually hit the earnings estimates. 2025 EPS is estimated at $9.48, vs 2024E $1.23. We think it can be bought today if one has some patience and fortitude.
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Volatile, and that's the price you pay for these growth stocks with higher reward potential. Really likes its business and where earnings come from. Tied to buildout of servers and data centres and AI-driven push. Latest earnings were really strong, with anticipated increased demand and revenue.
He'd be OK to buy, but you have to be comfortable with the volatility. It can go down more than the market on a down day. But if you stick with this one, sees upside from current levels. The bottom is in; ride up to $140-150, and then be cautious.
Micron Technology, Inc. engages in the provision of innovative memory and storage solutions. It operates through the following segments: Compute and Networking Business Unit (CNBU), Mobile Business Unit (MBU), Embedded Business Unit (EBU), and Storage Business Unit (SBU). The CNBU segment includes memory products and solutions sold into client, cloud server, enterprise, graphics, and networking markets. Social media mentions are up 119% in the past 24h.
When ASML reported its disappointing memory-chip earnings, he sold this one as a result. This business is so very cyclical; once sold off, takes anywhere from 2-6 quarters to come back.
ASML also talked about how China has built out facilities for memory chips. So, another supply of memory chips that will influence cyclicality in the space.