27 June 2024
If you are covering Micron’s latest financial results, please find below a comment from Ben Barringer, technology analyst at Quilter Cheviot:
“The artificial intelligence story continues to deliver for the tech manufacturers as Micron delivered what should be seen as a solid trading update. While expectations were high, and in some cases a little too high, the company came through with a beat and raise with its earnings and guidance. Unfortunately, this was not enough to placate what has been a choppy market in recent days and Micron’s share price has been hit, similar to how Nvidia has fared in recent days.
“Much of this will be investors simply positioning their portfolios for the news flow moderating somewhat from these AI growth names. Micron itself has seen its share price do very well this year, and as such it is natural people will want to take profits now given the run tech has had to this date. However, Micron remains a key part of the AI story and has three crucial factors going for it which should sustain its growth. Firstly, it has been very disciplined in its supply as demand has moderated. Secondly, demand for consumer tech is improving and should continue to do so as brands bring out AI smartphones and PCs – these will require a lot of memory. And finally, the chip manufacturers, specifically Nvidia, are highly reliant on high-bandwidth memory, of which Micron produces. As such, the company is a good way to play both the AI theme, as well as the improving backdrop in consumer tech. The share price reaction to these results does look a little overdone just now.”
