What makes the growth trajectory of Micron Technology Inc. (MU) worth it

0
597

The Micron Technology (MU) stock continues to rise, even though March sales declined. In Micron’s business, which is cyclical, there is a booming market. MU stock price is still growing, despite a decline in sales in March. Despite the cyclical nature of the company’s business, Micron’s market share is increasing. MU gained $4.6 during regular trading on Friday, bringing its trade to $89.93. The peak trading volume of 30.33M shares for Micron Technology Inc. has been recorded, which is high compared to its average daily volume of 17.95M shares.

Due to the shutdown of many production facilities, Micron experienced difficulty at the beginning of last year, as demand for memory chips has decreased. Micron is now running at full capacity as the market is recovered. Because of this, Micron Technology Inc. (MU) shares have gained significantly since November.

Sidney Ho, an analyst at Deutsche Bank, believes that the chip demand for DRAM chips will increase. As capital expenditures and purchases of memory chips are predicted to grow dramatically in the next quarters, the DRAM shortages are likely to persist. Micron’s (MU) earnings were forecast by Deutsche Bank to be $0.85 per share in the second quarter against this backdrop. With a full-year outlook of 4.44 per share, earnings could exceed $3.78 per share a year ago. Target was increased from $90 in its previous target price to $110 for MU shares, and the recommendation stayed the same – to buy.

Deutsche Bank’s valuation aligns with Wall Street’s optimistic expectations. Its share price is expected to rise 27%, in line with more than a dozen analysts’ consensus projections.

Many electronic devices continue to use DRAM memory chips. The primary beneficiary of the growing demand for DRAM memory is Micron, which is the leader in producing such chips.

It is one of the largest DRAM manufacturers and one of the leading suppliers of next-generation NAND memory. Data storage and transmission will grow in scale as IoT and 5G networks expand, giving an additional impetus to memory sales. Keep in mind that Micron’s sales will likely decline during a period akin to market saturation. As the market approaches saturation, Micron’s sales are likely to decline during this period due to cyclicality.

LEAVE A REPLY

Please enter your comment!
Please enter your name here