Micron Technology stock: high growth potential for 2023 remains

Posted by:Alex Belov Posted on:May 28,2022

With the development of artificial intelligence, virtual reality, 5G technologies, smart cars, as well as game consoles, IoT (Internet of Things) and other electronic devices, the structure of demand has changed markedly. This indicates a greater diversification and sustainability of the company’s profile.

Segment revenue

Computing & Networking – Storage devices for cloud servers, enterprises and networks. Revenue growth by 31% year-on-year.

Mobile devices are memory and storage products for smartphones and other mobile devices. The segment grew by 4% year-on-year.

Storage – SSDs and components for the enterprise, cloud, client and consumer storage markets. Growth by 38% year on year.

Embedded Solutions – Memory and storage products for the automotive, industrial and consumer markets. The segment grew by 37% year-on-year.

FORECAST DATE: May 28, 2022
Analyst "Oneinveststock"
Micron Technology stock price May 27, 2022 = $73,35
Target price in the next 12 months = $113
Percent upside potential for stocks

Now for both types of memory chips in the market there is a fairly healthy balance of supply and demand. The situation with the shortage of non-memory chip components is also improving. Micron Technology is ready to meet all the demand from the market. The company is also betting on a strong growth in supplies in the second half of the fiscal year: DRAM chips – within 15-19% and NAND chips – about 30%. Cost reductions (higher than industry-wide) are expected due to the introduction of top-notch 1α DRAM and 176nm 3D NAND technologies.

Over 90% of the global random access memory (DRAM) market is controlled by three companies: Samsung, SK hynix and Micron Technology. In the flash memory (NAND) market, Micron Technology is one of the top 5 market players.

The company continuously invests in the development of new products and processes. This allows it to remain among the world leaders in the industry, as well as provides revenue growth and a technological reserve for the future.

The situation in Ukraine, according to company representatives, will not affect production. But the role of the region as a source of gas and some minerals used in the production of chips is great. This means that some costs may still increase.

The resumption of quarantine measures in China related to the coronavirus outbreak poses a risk to the electronics supply chain. As with many companies, prices for energy, transportation, raw materials and wage costs will rise against this backdrop.

However, Micron Technology can offset this inflationary pressure by improving manufacturing techniques to increase its efficiency. In technological leadership, the company is faster than its competitors.

We maintain our buy recommendation for Micron Technologies stock with a target price of $113 over the next 12 months.

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Alex Belov

Developers by oneinveststock.com. Analyst, investor

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