|Day's Range||10.45 - 10.55|
Investing.com – Micron (NASDAQ:MU) is up about 50% for the year, but UBS cut its outlook on the chipmaker Friday amid worries that falling memory prices are likely to keep a lid on growth.
Micron Technology, Inc. (NASDAQ: MU) shares are up 2.5% Thursday as the debate rages on on Wall Street as to whether or not the semiconductor industry has hit the bottom of the current market cycle. On Thursday, Benzinga Pro subscribers received eight option alerts related to unusually large trades of Micron options. At 9:49 a.m., a trader bought 1,080 Micron put options with a $45 strike price expiring on April 17, 2020 near the ask price at $3.60.
Nvidia stock is up 35% in the past three months as Wall Street continues to jump back in the previously high-flying chip stock. So is now the time for investors to buy Nvidia stock?
The technology sector is made up of companies that, among other things, manufacture consumer electronics and their components, develop software, and provide information technology (IT) services like cloud hosting.
The larger debate among analysts and other observers: whether the semiconductor industry has bottomed in a down cycle or still has some distance to go.
Sanjay Mehrotra has been the CEO of Micron Technology, Inc. (NASDAQ:MU) since 2017. This report will, first, examine...
Micron's shares have risen because of hope that the U.S./China trade negotiations will be resolved favorably. -- Last week the SIA reported that September total semiconductor revenues rose to $38.4 billion (+8.3% month over month). September semiconductor revenues (excluding memory) was +8.8% - well below the seasonal average of +12.2%.
Investing.com – Marvell Technology surged on Monday as Wells Fargo (NYSE:WFC) upgraded its outlook on the chipmaker, betting that the revival in data center spending and the rollout of 5G-enabled phones would boost chip sales.
This has been a good year for investors in Micron Technology (NASDAQ:MU). Year-to date, Micron stock is up more than 50%.Source: Valeriya Zankovych / Shutterstock.com On Sep. 26, the company reported earnings results for the fourth quarter as well as the full year of fiscal 2019.As we get ready to wrap up another earnings season, Micron shareholders are now wondering if the stock price may go over $50 in the coming weeks. I do not expect the MU stock price to get a leg up soon. Rather it is likely to stay range-bound in the near future, possibly until its next earnings release expected in December. Here is why.InvestorPlace - Stock Market News, Stock Advice & Trading Tips MU Stock Has Two Main ProductsMicron produces semiconductor devices, computer memory and computer data storage, including dynamic random-access memory (DRAM), NAND flash memory and USB flash drives for different end markets. * 7 Stocks to Buy in November In terms of performance by product line, Wall Street analyzes Micron's results for two main products: DRAM and NAND.DRAM is used for primary system memory. It is widely found in digital electronics where low-cost and high-capacity memory is required.NAND flash memory is used for storage. Flash memory is a computer storage medium that can be electrically erased and reprogrammed. NAND forms the core of the removable USB flash drives.About two-thirds of Micron's revenue comes from sales of DRAM while another third comes from NAND flash as well as NOR and 3D XPoint. The DRAM market is bigger than NAND and has fewer manufacturers or competition for Micron. Profit margins are also higher in DRAM.After the end of fiscal 2018, management stopped reporting gross margins for individual products. In Q4 FY2018's earnings report, DRAM gross margin was 71% of revenue while NAND gross margin was 48%. In other words, the DRAM market is at this point more important for Micron stock. Micron Stock Q4 EarningsWhen it reported earlier in September, Micron stock beat on revenue and EPS. Revenue came at actual $4.87 billion; consensus had been $4.56 billion.Despite this beat, revenue was down 42% compared to the prior-year period and net income fell 87% YoY.The initial market reaction was sharply negative as Micron was down more than 10% the next day. In fact, it was the largest one-day declines in the company's share price and value in recent years.This decline might have been in part due to management's forecast EPS for the next quarter which came in a range of 39-53 cents. Analysts were expecting it at 47 cents.In 2018, the memory market had an oversupply and prices declined. For Micron stock, DRAM revenue suffered a big drop, with a decline of about 28% YoY from 2018 to 2019.As a result, the MU stock price suffered considerably. On Dec. 26, 2018, Micron's share price hit an annual low of $28.39. Therefore, investors are still quite nervous about the market outlook for MU products. And Wall Street is not yet expecting DRAM prices to recover fully or for the margins to improve, either. Different End Users for Micron ProductsMicron reports revenue in four units, corresponding to the end markets it serves: * Compute and Networking Business (CNBU) with about 50% share of revenue * Mobile Business (MBU) with about 2% share of revenue * Storage Business (SBU) with about 17% share of revenue * Embedded Business (EBU) with 11% share of revenueIn short, Micron's products can be found in data-center servers including the cloud, mobile devices, automotive, industrial, and consumer markets.Investors who plan to invest in MU stock long term may want to consider the trends in the semiconductor industry. That way, they have a better understanding of growth opportunities as well as threats for Micron stock and the competition.For example, especially in the first half of the year, many analysts have been concerned about the low memory price. This has a direct effect on Micron's revenue pie and hence, Micron stock. The other component of revenue is volume. And Wall Street has been discussing excess inventory levels and lower demand in DRAM and NAND for some time now.The prolonged U.S.-China trade war is also on the minds of investors. That's because over 55% of Micron's sales come from China. Where MU Stock Price Is NowHowever, it is not all doom and gloom for MU stock. For example, on June 25, Micron reported Q3 earnings that came in better than expected. The next day, the shares gapped up and opened at $35.87. Micron stock has not looked back since then.Investors have also been anticipating a memory-chip price recovery and a resolution to the U.S.-China trade wars. Of particular importance is Huawei, as about 13% of Micron's sales are to the Chinese company, which has been at the center of trade war issues.In July came an upgrade which gave MU stock another boost, easily pushing it over $45. On Sep. 11, Micron stock saw a 52-week high of $51.39. However, the negative reaction to the Q4 earnings result has disrupted the uptrend.Since then MU share price has been volatile and is currently hovering around $47.50. Therefore, I am expecting some short-term choppiness and potential profit-taking in Micron stock in the coming weeks, possibly until when it reports in December.Meanwhile, I expect Micron stock to trade in a range, most likely between $42.5 and $47.5 a share.If you're an investor who also follows technical analysis, then you should know that shorter-term charts imply that MU is likely to take a breather. Such a potential pullback would enable long-term investors to buy on the dips.Meanwhile, if you already own Micron stock, you may either consider taking some money off the table during this market bounce or hedging your positions.As for hedging strategies, covered calls or put spreads with Jan. 17 expiry could be appropriate as straight put purchases are likely to be expensive due to heightened volatility.A hedged position would give investors breathing space in case MU stock declined. Such a covered call would also enable investors to participate in any up move in MU stock price. In the meantime, they can decide on the best course of action for their portfolios, with less anxiety than an unhedged investor. The Bottom Line on Micron StockThe semiconductor industry is cyclical. It is never easy to know whether the downside of a given cycle might take longer than previously expected. Also, the current economic and political environment in the U.S. and globally offers plenty of questions.Despite company-specific fundamentals, the semiconductor stocks are all in the same boat. And what affects one stock is likely to affect its peers, too. Therefore those investors who want to see how the broader index is trending may also want to keep an eye on the iShares PHLX Semiconductor ETF (NASDAQ:SOXX).Over the long term, I would not bet against Micron stock. In the short-term, though, the share price of the chip company is likely to be choppy. Considering how far shares have gone in 2019, many investors may decide to wait until the next earnings report.As of this writing, the author did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Buy-and-Hold Stocks to Play Investing's Biggest Trends * 7 Stocks to Buy in November * 5 Strong Buy Stocks Under $5 With Massive Upside Potential The post Micron Stock Has Some Profit-Taking and Maybe a Dip Coming appeared first on InvestorPlace.
BOISE, Idaho, Oct. 29, 2019 -- Micron Technology Chief Financial Officer David Zinsner will participate in a fireside chat at the Bernstein Technology Innovation Summit in New.
Announcement of Periodic Review: Moody's announces completion of a periodic review of ratings of Micron Technology, Inc. New York, October 29, 2019 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of Micron Technology, Inc. and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers.
Mixed signals from the companies that make core internal components of tech hardware — memory chips and storage devices — are fueling expectations for another sluggish third quarter for much of the tech, with the exception of the internet and social media giants.
Micron stock has returned 28.1% over the past year. This shows that the company is matching the US semiconductor industry gain of 28.3%.
Intel's (INTC) third-quarter results benefit from growth in data-centric business, driven by robust adoption of high-performance products, including Xeon Scalable processors.
At first glance, Micron Technology (NASDAQ:MU) appears like a ridiculously undervalued technology play. Famous for its memory chips, Micron features an incredibly relevant business. Despite obvious risks to tech which we'll discuss further, our society has become increasingly digitalized. Thus, its products will have high demand. Nevertheless, MU stock sports a single-digit price-to-earnings ratio.Source: Charles Knowles / Shutterstock.com Additionally, Micron stock has held up well relative to other semiconductor firms. On a year-to-date basis, MU has gained 25%. This compares favorably to broader sector heavyweights like Intel (NASDAQ:INTC), up 18% YTD.Yet the overriding concern for MU stock remains the U.S.-China trade war and its associated tit-for-tat tariffs. Although the two economically warring sides have agreed to a temporary truce, this conflict has lost credibility, so to speak. After all, we've seen promises earlier that a resolution is forthcoming, only to be disappointed.InvestorPlace - Stock Market News, Stock Advice & Trading TipsMore critically for Micron stock, because the trade war lasted for so long, it has deeply impacted the U.S. economy. CNN Business contributor Christine Romans offered a pointed analogy of this crisis. Romans wrote:Think of it like this. A year ago, those tariffs were like a nasty cold. Irritating but temporary. Today, for multinational companies, the cold has become a chronic condition. * 7 Safe Stocks to Buy and Hold Through 2020 Even more bad news for MU stock and tech in general, a Reuters poll of economists suggested that the trade truce "is not an economic turning point." Additionally, recent high-level talks between U.S. and Chinese negotiators have done little to change the economic trajectory positively.With Micron stock absorbing hits from trade war-induced headwinds, this poll is worrisome. Nevertheless, a silver lining exists in this otherwise troubling narrative. Management Making the Right Moves for MU StockHistorically, Micron has lagged direct rivals Samsung and SK Hynix in memory chip technologies, specifically DRAM. A major reason why is that Samsung and SK Hynix are low-cost producers. As DRAM transitioned from groundbreaking innovation to commoditized asset, the latter two companies simply won out, hurting Micron stock.But in recent years, Micron started to get its act together. In an otherwise grossly disappointing fiscal fourth-quarter earnings report where MU reported a 42% loss of revenue year-over-year, management at least delivered one piece of good news: DRAM chips contributed 63% of Micron's revenue and they represented a higher percentage of profits.In other words, Micron was finally catching up to its direct competitors. While the company was always big on innovation, it wasn't always operationally efficient. Now it has the best of both worlds, boding well for MU stock.But in this race to catch up to Samsung and SK Hynix, Micron hasn't actively embraced the next generation of memory chip production. Called extreme ultraviolet (EUV) lithography, it potentially could change the game for the underlying industry. Samsung and SK Hynix are on board, but Micron has been pensive.Ordinarily, I wouldn't take encouragement from this behavior, especially for a tech firm. But for MU stock, I think the company's cautionary approach is the correct one.While EUV lithography is an exciting step forward in chip production, it's a fresh concept. Like buying a car model on its first production run, problems could sprout up later.More critically, Micron has experienced uniformity issues with their EUV tests. In order to remedy this problem, the company would have to utilize an intensive, complicated procedure. Unfortunately, this would only ramp up costs for Micron, making EUV lithography practically untenable. It's All About ContextOf course, a flip side exists to the above strategic move. Without an active push toward EUV development and integration, Micron risks falling behind to its rivals yet again. Frustratingly, stakeholders of Micron stock would find themselves going back full circle.Outside of the trade war, I would agree with this point. Obviously, that's not the world we live in. Further, the economic conflict has imposed real costs to Micron. As I said earlier, the company lost almost half of its fiscal Q4 revenue to China-related headwinds.And when you factor in the heightened possibility of a U.S. recession, I'm more encouraged with management's decision. This isn't the time to play around with a still shaky innovation, especially with Micron now dominating in DRAM.Now, let me back up a little bit: this isn't the most comfortable endorsement of MU stock. However, it's clear that management has a bottom-line focus right now. Given the circumstances, MU appears a smart, undervalued pick in the memory chip segment.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell for Investors Fearing Another Q4 Downturn * 5 Penny Stocks to Buy If You Can Risk It * 7 Safe Stocks to Buy and Hold Through 2020 The post Management Holding Steady Is the Right Move for Micron Stock appeared first on InvestorPlace.