Needham analyst Rajvindra Gill weighed in today with a few insights on Micron Technology, Inc. (NASDAQ:MU), after the company’s CFO Ernie Maddock presented at the Needham & Company Annual Growth Conference in New York.
Gill wrote, “Ernie spoke about investor interest in the current NAND environment, which is expected to be tight in 1H17 but grow exiting the year. Micron expects both supply and demand bit growth to be 30-40% this year but did not break out growth by quarter. Micron also stated that it expects a meaningful transition to its second-generation 64 layer 3D NAND by the end of the year, which will allow for double the bits per wafer at a 30% reduction in cost. MU will contribute significantly in the 15-20% bit supply growth in DRAM this year with its transition to the 1X node. MU forecasts 20-25% DRAM demand growth this year.”
“MU is seeing demand for its specialty DRAM memory in the Automotive sector, as higher level ADAS applications and infotainment demand higher memory content per vehicle. We believe that Micron is poised to exceed the 2014 cycle, where demand is far outpacing supply and DRAM is targeting more than just PCs – cloud computing, data centers, networking, graphics, and automotive. Net, with DRAM products entering multiple end markets, and NAND targeting high-growth enterprise SSDs and mobile storage, we believe Micron is well positioned to capitalize on the improving DRAM and NAND markets,” the analyst added.
The analyst reiterated a Buy rating on shares of Micron, with a price target of $33, which represents a potential upside of 47% from where the stock is currently trading.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Rajvindra Gill has a yearly average return of 14.1% and a 61% success rate. Gill has a -34.8% average return when recommending MU, and is ranked #76 out of 4347 analysts.