2024-06-23 21:31:47 ET
Summary
- I am reiterating my Buy rating due to strong pricing dynamics and expected significant uplift in HBM revenues.
- The memory market is highly cyclical, with recent capacity constraints and strong demand leading to price increases and strong sales growth for Micron.
- Micron was late to the HBM market but is gaining share, and I believe the company is likely to beat on estimates in Q3 with compelling results and guidance.
Prelude
I initiated coverage of Micron Technology, Inc. ( MU ) following Q2 earnings, calling it a blowout report . Today, I'm following up and reiterating my Buy rating on strong pricing dynamics in the memory industry. The market heavily rewarded Micron after fiscal Q2, given the surprisingly strong HBM performance and early return to profitability. Following the Q2 report, I wrote
I am now much more bullish on Micron's medium-term outlook. The growth story here is compelling as long as you believe demand for AI accelerators will be robust. I do believe this demand is robust at least through 2024, and therefore am initiating coverage of Micron with a Buy rating. Micron is a leader in the memory industry and will be a critical player in the ongoing build of accelerated computing infrastructure.
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For further details see:
Micron Q3 Earnings Preview: Stronger Than Expected Memory Recovery, Micron Remains A Buy