by Ian Harvey
December 11, 2019
Micron Technology has plenty of tailwinds propelling it upwards now that it is seeing a difficult year in the rearview mirror.
“Stock Options Made Easy” members are already profiting from a call option, but more is expected!
Find out how high MU share price will go!
“Stock Options Made Easy” members executed an options trade on MU yesterday when the market opened and are already up a potential profit of 40%. This appears to just be the start of a good comeback for Micron Technology as things are starting to turn in the company's favor; therefore, it is not too late to join us for this profitable ride!
The company's core business includes the manufacturing of DRAM, NAND, 3D XPoint memory, and NOR flash technology used in solid-state drives (SSDs), PC graphics cards, video game consoles, and other memory and storage products.
Micron Technology is enjoying a secular demand trend coming from non-consumer markets. Its flash memory technology (NAND and NOR) is used to make SSDs, which are increasingly being adopted by cloud storage providers for their faster data retrieval speed and compact size relative to hard disk drives.
Another market where Micron Technology is seeing growth is automotive, where the company has a leading share position supplying storage and memory products used for infotainment systems and other applications in the car.
Also, the memory specialist recently got a shot in the arm as TrendForce data revealed that the price decline in the DRAM (dynamic random access memory) industry has slowed down. Fourth-quarter contract DRAM prices were down just 5% as compared to huge double-digit declines witnessed earlier this year.
What's more, TrendForce predicts that DRAM prices will decline in the low single digits once again in the first quarter of calendar 2020 and recover as the year progresses. This indicates that the sustained downturn in the memory market could be over in 2020. If that's indeed the case, now is a good time to buy Micron options.
Micron anticipates DRAM bit supply to increase in the mid-teens, while demand is expected to jump between the high teens and 20% range.
YOU NEED TO BE IN TO PROFIT!
Other Tailwinds for Micron Technology…..
Memory demand is finally coming back. DRAMeXchange reports that global DRAM revenue increased 4% in the third quarter of 2019, bringing an end to three consecutive quarters of sequential declines. Micron reportedly enjoyed a 30% jump in bit growth during the quarter.
The jump in DRAM demand during the quarter was driven by smartphone and server markets. This small uptick in DRAM shipments bodes well for Micron going into 2020, because a couple of key DRAM-consuming markets are expected to grow significantly next year.
The ramp-up of 5G smartphones, for instance, could help sustain the recovery in DRAM demand. By next year, 5G smartphones are expected to account for 10% of overall smartphone shipments. Micron has already launched DRAM products aimed at the 5G smartphone space, so it should be able to take a nice bite out of this market next year.
The server DRAM market is also expected to pick up the pace next year. DigiTimes predicts that demand for servers will increase to the tune of 5% in 2020, since the ongoing inventory adjustments are almost over. What's more, the forecast says that server demand is all set to clock a compound annual growth rate of 6.5% through 2024 on the back of new data center deployments.
All of this indicates that the memory market could enjoy a far more favorable demand environment in 2020. Coupled with the improvements on the supply side of things, Micron can expect a price recovery next year.
It appears that analysts may be starting to see Micron Technology clawing its way back up the charts.
Micron Technology‘s stock had its “buy” rating reaffirmed by analysts at Mizuho in a research report issued to clients and investors on Monday, November 11th. They currently have a $53.00 price target on the semiconductor manufacturer’s stock, up from their previous price target of $50.00.
Several other equities analysts have recently commented on the company…..
Three investment analysts have rated the stock with a sell rating, thirteen have given a hold rating and twenty-two have given a buy rating to the company. Micron Technology currently has an average rating of “Buy” and a consensus target price of $53.46.
Demand for memory is climbing thanks to the increased use of smart devices, the proliferation of data centers and the deployment of new technologies such as the IoT (Internet of Things) and 5G (fifth-generation) wireless.
This demand growth will benefit MU stock.
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The questions remain......How high will Micron Technology shares go?
When will members exit the options trade?
Will we recommend another options trade on Micron Technology?
What will “Stock Options Made Easy” advise members to do?
AS ALWAYS THE DECISION IS YOURS!
An Important Note: That any suggestions for options trade considerations require investors/traders to use their own discretion as to when to enter or exit! As well, it is advisable to do further research and due diligence before executing your trade.
It is sometimes best to exit a trade, if there is already sufficient profit accrued, before an earnings report is presented. GREED can be the undoing of a nice profit!