21 December 2023
If you are covering Micron’s latest financial results, please find below a comment from Ben Barringer, technology analyst at Quilter Cheviot:
“Micron’s numbers show the computer memory industry is in a much improved position compared to this time last year. Demand is improving, particularly in PCs and smartphones, where consumer weakness had driven an oversupply in the market. We are now beginning to see demand outstrip supply as inventories have normalised and the macroeconomic environment has stabilised. This will be good for pricing and ultimately benefit Micron’s bottom line, hence we have seen a positive revision in the guidance it has provided.
“While traditional sales are improving, artificial intelligence remains the number one game in town for those in the tech sector. Micron is seeing strong demand for its High Bandwidth Memory products, and these are likely to fuel the new data centres that will be required to keep the AI boom going.
“The problem this poses now for investors is there is likely to be limited upside going forward. Micron is up 62% year to date, fractionally ahead of the wider semiconductor market – which has been driven primarily by Nvidia and AMD – and considerably ahead of the wider tech-dominated Nasdaq, which is up just over 40% in the year. These performance numbers are unlikely to be repeated, but in the near-term at least the picture looks good. Computer memory is a cyclical business though so it is important to watch for when things might turn again.”
