Micron shares rise after Deutsche Bank upgrades rating on DRAM pricing hopes
- S&P 500, Nasdaq notch biggest weekly losses since March
- S&P 500 could end the year over 10% higher from here - Piper Sandler
- Citi says Meta shares to rally in near term on share gains, upcoming AI event
- Ads are coming to Amazon Prime Video next year; Stock pops
- 'Sell the last rate hike' strategy is in action, stocks could fall further - BofA's Hartnett
Investing.com -- Shares in Micron (NASDAQ: MU) rose in premarket U.S. trading on Monday after analysts at Deutsche Bank upgraded their rating of the chipmaker, citing a faster-than-anticipated improvement in the pricing of its key DRAM chips.
In a note to clients upgrading their outlook of the stock to buy from hold, the analysts said that an "inflection is here" in the prices for the DRAM semiconductors, which hold on to information from applications while a system is in use.
The analysts added that DRAM prices are beginning to "improve at least one quarter" ahead of their expectations thanks to a recent surge in demand for artificial intelligence servers. So-called high bandwidth memory (HBM) DRAM chips are commonly used in generative AI.
"Our recent checks with the supply chain suggest that the price increases are sustainable and should accelerate in the next two quarters given the limited supply growth," the analysts said.
As a result, they now expect Wall Street estimates for Idaho-based Micron to move up "meaningfully" for both the 2023 and 2024 calendar years. Micron, which is due to unveil fiscal fourth quarter results later this month, is also seen delivering a better-than-expected forecast for revenue and earnings per share in its first quarter, the Deutsche Bank analysts predicted.
The company beat projections in its most recent three-month results released in June, as an industry-wide glut of memory chips showed signs of easing.
"While our previous neutral stance on [Micron] was driven by the levels of excess inventory in the supply chain and weak macro end-demand, we now see the worst of the downcycle as behind us," the analysts said.
You May Also Be Interested In
- UAW union warns of extended strike against major U.S. automakers
- Here's why UBS chose this stock as its top web builder pick
- Bristol-Myers Squibb (BMY) Announces Perioperative Regimen of Neoadjuvant Opdivo and Chemotherapy Followed by Adjuvant Opdivo Significantly Improves Event-Free Survival in Patients with Resectable Non
Create E-mail Alert Related CategoriesGeneral News, Hot List, Investing
Related EntitiesDeutsche Bank, Raising Prices, Earnings
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!