News that David Tepper would continue holding Micron Technology (NASDAQ: MU) helped stop the chronic selling in the stock on the markets. The company’s quarterly earnings, set for this Thurs., Sep 20, could get bulls confident in the company again.
Tepper told CNBC he is very long MU stock. Although memory and NAND storage prices are falling, the demand for these components continue to weigh on supply. PCs and smartphones make up only one portion of total demand. The backend systems, like servers, AI systems, and data centers, all require lots of memory and high-speed storage.
On its last earnings forecast, Micron raised its outlook by so much that the stock rallied to nearly $65 in June. Though few may predict the trading pattern of MU stock ahead of results, the company’s valuations continue to confound experts. The average price target on MU shares is $77.62, according to Tipranks. The company will eventually rebound if DRAM demand-supply is better than markets realize.
Micron continues to cut costs, raise operating efficiency and increase shareholder value through share buybacks and debt reductions. As technology moves forward through ADAS, 5G, IoT, demand for NAND and DRAM will only go up.
Micron may have bottomed at the low $40’s and could recover over time.
