Micron’s stock surges after Deutsche Bank analyst says its time to buy

/ / News

Shares of Micron Technology Inc. rallied 2.5% in premarket trading Tuesday, after Deutsche Bank analyst Sidney Ho upgraded the memory chip maker, citing signs suggesting DRAM demand has picked up in both mobile and server markets. Ho raised his rating to buy from hold, and boosted his stock price target by 20%, to $60 from $50. “While we acknowledge that there are risks that the recent demand strength is driven by inventory accumulation, we nonetheless believe it will help lessen the seasonal soft demand in the first half of CY21,” Ho wrote in a note to clients. “In addition, with DRAM suppliers showing willingness to cut back on capital spending, there is a belief among key smartphone and server OEMs that supply could tighten again in the second half of CY21, which should lead to price stabilization earlier that we previously expected.” Ho said he believes the risk-versus-reward outlook is now skewed more positive, as the risk of significant estimate cuts has been substantially reduced. The stock has slipped 5.8% year to date through Monday, while the PHLX Semiconductor Index has run up 31.6% and the S&P 500 has gained 9.4%.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.