Details from Sterne Agee CRT Management Call Shows the Market May Have Oversold Micron (MU)

Sterne Agee CRT analyst, Douglas Freedman, believes the market has misread Intel (NASDAQ: INTC) blog post about a $5.5B investment in nonvolatile memory production and oversold Micron (NYSE: MU) shares. INTC announced in a blog post yesterday that it would invest up to $5.5 billion in its Dalian, China-based facility for non-volatile memory capacity. The facility has been producing 65 nm products for INTC since 2010.

After speaking with management, Sterne Agee CRT received clarification and believes the investment reflects INTC's increased confidence in non-volatile memory as a longer-term growth vector and will be spread out over an unspecified number of years. Production from the facility will be 3D NAND at the beginning, but can be migrated to 3D Xpoint as needed.

MU has been traded down more than 10% after INTC's capex announcement, likely due to the lack of details in the post as well as investors' increasing concern about INTC moving to internal memory production from the JV with MU. If Sterne Agee CRT is correct, yesterday's post is not indicative of INTC terminating the JV with MU.

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