Microsoft's (MSFT) Q3 Outlook Initially Bullish for Micron (MU) - Cowen
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Cowen and Company is out with commentary on the semiconductor sector following commentary from Microsoft (Nasdaq: MSFT) on Tuesday night.
Analyst Timothy Arcuri notes that Microsoft is keeping a lean OEM channel ahead of the July 29th launch of Windows 10. The analyst commented, The company stated that it expects Device and Consumer licensing (which includes consumer OEM Windows as well as consumer Office, patents and retail stores) to be up ~9.4% Q/Q and in line with its estimate for PC market growth. In essence, this means MSFT expects PC’s to be ~400 bps ABOVE normal seasonal.
Arcuri also commented on implications of Microsoft's outlook: With data points now lining up for an above-seasonal CQ3, this is on the surface bullish for Micron (Nasdaq: MU), in our view, execution issues notwithstanding. As it relates to Marvell (Nasdaq: MRVL), risk still exists for the July Q (we model storage -3% Q/Q), but we model October up ~12% Q/Q (largely in line w/overall MRVL Street revenue estimates). These data points start to give credence to MRVL seeing a meaningful turn in its storage business in the October Q as it historically has exhibited a high correlation (0.84) to INTC PCCG business, which ultimately should be directionally correlated with MSFT D&C revenue.
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