Micron Technology (MU) – Get Report shares fell Thursday right after Deutsche Lender analyst Sidney Ho downgraded the semiconductor enterprise to maintain from buy and slashed his share-value concentrate on 20% to $48 from $60.
Memory-chip makers face “tough quarters in advance,” he wrote in a commentary cited by Bloomberg.
Micron not too long ago traded at $46.37, down 4.4%. The stock has slid 14% calendar year to date. Meanwhile, the Nasdaq Composite index has jumped 24%.
“Comprehensive checks” of the offer chain immediately after new “lackluster steerage” from Western Digital (WDC) – Get Report made him much more pessimistic on the supply-demand dynamic for memory semiconductors in coming quarters, The Fly stories.
Stock buildups for cloud-data-center shoppers “appear far more acute than we at first anticipated,” Ho mentioned, in accordance to Bloomberg.
In other vital locations demand from customers is weakening, too, he claimed. It has “dropped off sharply due to the fact mid-June,” and “there continues to be sizeable macro uncertainty related to the covid pandemic,” Ho claimed.
He has lowered his Micron estimates to account for reduce rates and expects analysts’ estimates to drop “sharply” from present degrees.
In late June, Micron mentioned inventories among some of its clients were high. But the firm suggested the buildups had been amongst cellular and automotive memory prospective buyers, somewhat than cloud clientele.
Final week, subsequent a connect with with Micron execs, Mizuho analyst Vijay Rakesh described Micron was still looking at powerful cloud demand.
He additional that the company has viewed “some inventory builds at customers” and that some “normalization” is expected for knowledge-centre need all through the back again fifty percent of the calendar year.