Micron Technology’s inventory obtained a uncommon “underweight” score from a brokerage due to the memory-chip maker’s heavy publicity to mobiles and PCs at a time when rising inflation forces shoppers to rein in spending. Micron shares have been down about 6 % at $71.18 (roughly Rs. 5,530) in early buying and selling on Friday. [1]

Figure 1. Micron Downgraded to ‘Underweight’ Rating as PC, Mobile Demand Slows with Inflation

Figure 1 shows “with the global economy expected to face headwinds, we are concerned about Micron’s more than 50 percent exposure to consumer-like markets such as PCs, mobile, and other,” Piper Sandler wrote in a word to shoppers.

The brokerage additionally expects the corporate’s chip enterprise that caters to the auto trade to endure attributable to rising charges, a slowing financial system, and the opportunity of an extra stock construct.

Piper Sandler added that the Dynamic Random Access Memory (DRAM) market, which represents over 70 p.c of the corporate’s complete income, had already began to see value declines for many configurations. [2]

Market research firm Counterpoint reported in April that global PC shipments were down 4.3 percent in the first quarter of 2022, as the war in Ukraine and China’s lockdowns pressured already fragile supply chains and added to shortages of components.

Global smartphone shipments are expected to decline 3.5 percent this year, according to IDC. [3]

"While we do feel the company has done an outstanding job to reduce its cost structure and remain financially disciplined, we continue to view memory as largely a commodity market compared to the rest of our universe. As a result, we do feel Micron is likely to underperform," Piper Sandler said.

The brokerage, however, expressed confidence in the company's data centre business, which represents less than 30 percent of revenue. It cut Micron's price target by $20 (roughly Rs. 1,550) to $70 (roughly Rs. 5,440). [4]

References:

1. https://gadgets360.com/laptops/news/micron-downgraded-underweight-rating-pc-mobile-demand-slow-inflation-3037501#pfrom=home-popular
2. https://aajkitaazanews.com/micron-downgraded-to-underweight-rating-as-pc-mobile-demand-slows-with-inflation/
3. https://digitnews.in/micron-downgraded-to-underweight-rating-as-pc-mobile-demand-slows-with-inflation/
4. https://gadgets360.com/laptops/news/micron-downgraded-underweight-rating-pc-mobile-demand-slow-inflation-3037501#pfrom=home-popular

Cite this article:

Thanusri swetha J (2022), Micron Downgraded to ‘Underweight’ Rating as PC, Mobile Demand Slows with Inflation, AnaTechMaz, pp. 98