Shares of Micron Technology Inc. rallied toward a seven-month high Tuesday, after Mizuho analyst Vijay Rakesh went back to being bullish on the memory chip maker on surprisingly improving demand trends, which should provide a tailwind for Micron, as well as Western Digital Corp., into next year.
Rakesh upgraded Micron MU,
When Rakesh downgraded Micron last month, he cited expectations of a soft demand outlook for the first half of 2022 for PCs and notebooks, server and handset markets.
“However, our recent checks indicate the ‘ACTUAL’ demand is improving across all three markets,” Rakesh wrote in a research note, with first-quarter PC/NB builds “only” flat to down 5% from the previous quarter, compared with expectations of a 10% to 15% decline and handsets flat versus expectations of down 10%. He also believes server demand could improve.
Micron’s stock ran up 2.2% in premarket trading. It had soared 22.8% from the Oct. 20 close through Monday, while the PHLX Semiconductor Index SOX,
Rakesh also upgraded Western Digital WDC,
“We now see potentially better-than-expected pricing trends in 1Q22 and 2Q22,” Rakesh wrote. “We believe 2H22 could see memory pricing stabilize further if PC build trends continue to outperform.”
