246.94 +1.35 (0.55%)
After hours: 7:41PM EST
|Bid||247.02 x 1300|
|Ask||249.90 x 1000|
|Day's Range||238.75 - 245.99|
|52 Week Range||144.79 - 245.99|
|PE Ratio (TTM)||52.20|
|YTD Daily Total Return||54.30%|
|Beta (5Y Monthly)||1.55|
|Expense Ratio (net)||0.46%|
Stocks resurged Thursday afternoon after Bloomberg reported that U.S. negotiators had reached terms of a phase one trade deal that now awaits approval from President Donald Trump
Since early 2018, Micron Technology (NASDAQ:MU), one of the most important chip makers, and MU stock have been poster children for the controversial relationship between the U.S. and China.Source: Piotr Swat / Shutterstock.com But in 2019, MU stock is up 47%. Similarly, the iShares PHLX Semiconductor ETF (NASDAQ:SOXX) is up about 46%. Although I believe in the long-term fundamental strength of Micron stock, I am expecting December to be a volatile month for MU stock as the trade war either intensifies or wanes. Considering how far the shares have gone in 2019, many investors may find it premature to bet Micron shares will go higher soon. Instead, they may wait to hit the "buy" button until the company's next earnings report, expected to be released in mid-December. What to Expect From MU's Next Earnings ResultsOn Sept. 26, Micron reported its fiscal Q4 results. The company's revenue and earnings per share both came in slightly above analysts' average estimates.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut the company's revenue tumbled 42% year-over-year and its net income plunged 87% YoY.Following the earnings report, MU stock initially stumbled. However, since then it has fully recovered. In other words, Micron stock tends to be highly volatile after it reports its results. * 7 Energy Stocks That Are Still Worth Buying In 2020 When MU releases its Q1 results soon, analysts will scrutinize the sales of the two main types of computer memory produced by the company: DRAM and NAND.DRAM is used to retain the data needed by computer processors to function. Micron is the world's third largest maker of DRAM chips.NAND flash memory is used for data storage. Globally, Micron is the fourth largest maker of NAND chips.The DRAM market is bigger than the NAND market, and MU faces less competition in the latter market. DRAM is also more profitable for MU than NAND. Micron's Strong Products Will Likely Propel MU Stock HigherAccording to recent research by Rachel Rice at the University of Nebraska at Omaha, "Micron has continuously been on the cutting edge of development. [But] the biggest problem in the industry currently is the level of competitiveness… and the nature of the product[s] lead to price competition."Given those dynamics, Wall Street closely follows DRAM and NAND prices as well as their demand and supply levels.When DRAM prices increase, Micron raises its DRAM output to exploit the high prices. Higher supply eventually leads to falling prices and declining revenues.In 2019, there have been signs that the downturn of the memory chip market is beginning to ease. These signs have contributed to the rally of MU stock.During MU's Q4 conference call, its management said that in fiscal 2020, MU would be spending less on DRAM and NAND supply increases. As customers' inventories go down, prices should also stay stable. Thus in a few quarters, MU's earnings will likely improve.Semiconductors like Micron play a major role in the global economy And despite recent economic and memory price challenges, Wall Street is bullish on global demand for memory products.Demand for memory is climbing thanks to the increased use of smart devices, the proliferation of of data centers, and the deployment of new technologies such as the IoT (Internet of Things) and 5G (fifth-generation) wireless.This demand growth will likely benefit the owners of MU stock for many years. The Short-Term Headwinds Facing Micron StockHowever, there are two main issues that may derail MU's revenue growth and Micron stock price.The Trade War: Micron has been one of the most front-and-center companies in the U.S.-China trade war. MU has many China-based customers, including the controversial firm Huawei. Over half of Micron's sales come from China.The two countries' style of negotiating makes me doubt if there will be a swift resolution to the trade war. And as long as the trade skirmish continues, the volatility of Micron stock and the sporadic negative bias towards MU is likely to continue.A Potential Economic Slowdown:Many analysts regard the semiconductor sector as an important leading indicator for the health of the economy. Therefore if the global economy slows in 2020, then MU stock price is likely to be adversely affected. So Should Investors Buy Micron Stock Now?Over the past year, analysts have had mixed views on MU stock, which is to be expected given the level of uncertainty in the industry and the stock market.In addition, the charts of MU make it hard for me to be fully constructive on MU stock right now.$50 is an important resistance level for MU. Therefore, in the next few weeks, I expect MU stock to trade between $42.5 and $47.5.Investors who do not yet hold MU stock may want to study the company's Q1 results to try to determine if demand for the company's products are recovering and if softening chip prices and compressed margins are behind us.I'd look to be a buyer of the stock as Micron stock approaches the low-$40s.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 Energy Stocks That Are Still Worth Buying In 2020 * 7 Strong Stocks to Buy That Won Q3 Earnings * 5 Safety Stocks to Buy Without Trade War Exposure The post Should Investors Buy Micron Stock Ahead Of MU's Earnings? appeared first on InvestorPlace.
Despite occasional trade tensions, U.S. equity gauges have added solid gains this year. But these sector ETFs handily beat the soaring broader market.
Each of the three major U.S. stock indices hit fresh record highs Tuesday after China signaled trade negotiators were pacing toward a deal, and a batch of retail earnings came in mostly stronger than expected.
Most of the double-digit sales growth expected next year will be about regaining lost ground to get back to 2017 levels, says Beth Kindig.
The positive trend is likely to continue given the positive earnings estimate revisions, which are generally a precursor to an earnings beat though earnings surprise is difficult to predict this time.
Plenty of companies have produced double-digit sales increases and wider margins during an otherwise dismal earnings season.
Multinational semiconductor and telecommunications giant Qualcomm delivered strong fiscal fourth-quarter earnings to investors, which could put the ETFs with the heaviest weightings of the company on watch ...
Texas Instruments is a poster child for financialization, but what happened here isn’t unique, writes Ben Hunt.
Semiconductor company Broadcom could head into 2020 with a value-oriented play that could give bargain bin-hunting ETF investors an opportunity to consider—leveraged and unleveraged. With companies like Apple and Samsung utilizing Broadcom chips, the company is poised for growth that goes beyond its current value. “In the fiscal third quarter of 2019 (ended in August), Broadcom's networking vertical performed well due to strong demand from the switching and routing platforms,” Aditya Raghunath wrote in Motley Fool.