MU - Micron: Stock Is Not Overvalued

2024-05-13 17:15:18 ET

Summary

• Micron's revenue growth in H1 FY2024 exceeded expectations, driven by strong performance in DRAM and NAND.
• The company's profitability has improved faster than anticipated, with gross margins returning to positive and higher-than-forecasted net margins.
• Micron has secured a significant government grant under the CHIPS and Science Act, which will benefit its cash flow margins. However, competition in the HBM memory segment poses a risk.

In our prior analysis of Micron Technology, Inc. ( MU ) from February, we looked into the advancements in the company's HBM memory technology, highlighting its potential to expand market share through the development of HBM3e. Additionally, we reaffirmed our expectations for Micron's revenue growth in 2024, anticipating a recovery in market pricing for DRAM (98.9%) and NAND (18.3%), as major players in the memory chip market strive to balance supply and demand....

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