AMD - Micron: Reasonable Valuation On Massive Tailwind
2024-03-27 21:08:42 ET
Summary
- Consumer electronics market is starting to sequentially grow, providing a significant tailwind for Micron.
- Memory chip market has entered a phase of sequential growth as a result of CAPEX cuts, AI datacenter demand, and growing consumer electronics demand.
- Micron's valuation is undervalued, with a reasonable forward price-to-earnings ratio compared to industry peers.
Introduction
In my previous article , I had a buy rating on Micron ( MU ). At the time, my bullish thesis revolved around two main reasons. First, there were initial signs of consumer electronics demand recovery, which could positively impact Micron through a recovery in the memory chip demand. After a subdued demand environment throughout 2023, consumer electronics vendors were starting to see positive year-over-year growth at the time of writing. Further, signs of memory chip market recovery were starting to take shape after the memory chip makers including Micron aggressively cut the CAPEX....
Micron: Reasonable Valuation On Massive Tailwind