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Will Recovery in DRAM Demand Aid Micron's (MU) Q1 Earnings?
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Micron Technology Inc.'s (MU - Free Report) first-quarter fiscal 2020 results are scheduled to be released on Dec 18.
The company’s performance in the soon-to-be-reported quarter is likely to have gained from a stabilizing memory market despite ongoing macroeconomic and trade uncertainties. Revival in DRAM demand on the back of improved customer inventory adjustments might have been a tailwind.
Click here to see how the company fared overall in the fiscal first quarter.
Stabilizing Memory Market: A Silver Lining?
Micron has been bearing the brunt of declining memory prices over the last few quarters. Oversupply in memory chip market eroded the average selling prices (ASPs) of DRAM and NAND, thereby affecting its top line.
However, progress in customer inventory adjustments in most end-markets is expected to have been a breather in the fiscal first quarter.
Per the Semiconductor Industry Association, worldwide sales of semiconductors came in at $36.6 billion in October 2019, up 2.9% sequentially. This positivity might reflect on the memory chip sales of Micron, which is one of the leading players in the semiconductor market.
A strong uptick in DRAM bit shipments for the cloud, graphics and PC markets is likely to have provided a cushion in the quarter to be reported.
Per DRAMeXchange, a division of TrendForce, DRAM ASP has been enduring a slight sequential decline so far in the calendar fourth quarter. Trading volume in October witnessed considerable sequential growth, which per the firm, reflects purchasers’ increased willingness to pay. This in turn, is expected to have positively impacted bit demand for DRAM during the fiscal first quarter.
Coming to NAND, demand elasticity and lower industry supply are leading to improved market conditions and reducing industry inventory. This too is likely to have been an upside.
However, U.S.-China trade dispute persists as a key concern this earnings season.
Long-term earnings growth rate for Keysight, Fortinet and CommVault Systems is currently estimated at 9.1%, 14% and 10%, respectively.
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Will Recovery in DRAM Demand Aid Micron's (MU) Q1 Earnings?
Micron Technology Inc.'s (MU - Free Report) first-quarter fiscal 2020 results are scheduled to be released on Dec 18.
The company’s performance in the soon-to-be-reported quarter is likely to have gained from a stabilizing memory market despite ongoing macroeconomic and trade uncertainties. Revival in DRAM demand on the back of improved customer inventory adjustments might have been a tailwind.
Click here to see how the company fared overall in the fiscal first quarter.
Stabilizing Memory Market: A Silver Lining?
Micron has been bearing the brunt of declining memory prices over the last few quarters. Oversupply in memory chip market eroded the average selling prices (ASPs) of DRAM and NAND, thereby affecting its top line.
However, progress in customer inventory adjustments in most end-markets is expected to have been a breather in the fiscal first quarter.
Per the Semiconductor Industry Association, worldwide sales of semiconductors came in at $36.6 billion in October 2019, up 2.9% sequentially. This positivity might reflect on the memory chip sales of Micron, which is one of the leading players in the semiconductor market.
A strong uptick in DRAM bit shipments for the cloud, graphics and PC markets is likely to have provided a cushion in the quarter to be reported.
Per DRAMeXchange, a division of TrendForce, DRAM ASP has been enduring a slight sequential decline so far in the calendar fourth quarter. Trading volume in October witnessed considerable sequential growth, which per the firm, reflects purchasers’ increased willingness to pay. This in turn, is expected to have positively impacted bit demand for DRAM during the fiscal first quarter.
Coming to NAND, demand elasticity and lower industry supply are leading to improved market conditions and reducing industry inventory. This too is likely to have been an upside.
However, U.S.-China trade dispute persists as a key concern this earnings season.
Micron Technology, Inc. Revenue (TTM)
Micron Technology, Inc. revenue-ttm | Micron Technology, Inc. Quote
Zacks Rank & Stocks to Consider
Micron currently has a Zacks Rank #4 (Sell).
A few better-ranked stocks in the broader technology sector are Keysight Technologies Inc. (KEYS - Free Report) , Fortinet, Inc. (FTNT - Free Report) and CommVault Systems, Inc. (CVLT - Free Report) , each flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Keysight, Fortinet and CommVault Systems is currently estimated at 9.1%, 14% and 10%, respectively.
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Would you like to see the updated picks from our best market-beating strategies? From 2017 through Q3 2019, while the S&P 500 gained +39.6%, five of our strategies returned +51.8%, +57.5%, +96.9%, +119.0%, and even +158.9%.
This outperformance has not just been a recent phenomenon. From 2000 – Q3 2019, while the S&P averaged +5.6% per year, our top strategies averaged up to +54.1% per year.
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