Micron Technology, Inc. (MU)’s Sell-off May Be an Opportunity


Micron Technology, Inc. (NASDAQ:MU) tumbled by 6.32% yesterday on investors’ worries about the company’s earnings prospects amid rising competition from Samsung. However, Alex Guana, senior analyst at JMP Securities, has said on CNBC that the company’s fundamentals are sound, and the recent sell-off is just a “blip”. He argues that Micron Technology, Inc. (NASDAQ:MU) is a very volatile stock and usually takes the first hit when there is a broad sell-off. He dismisses concerns that come from Samsung increasing its DRAM production, suggesting they are baseless. On Friday, the stock of Micron has gained around 0.80% so far, amid the continuing decline of the stock markets.

Micron Technology, Inc. (NASDAQ: MU), SanDisk Corporation (NASDAQ:SNDK), International Business Machines Corp. (NYSE:IBM), Jim Cramer, Old Tech Stocks

However, the Seoul-based electronics manufacturer stated that it does not intend to gain share in the DRAM market and is ramping up production on account of rising demand, according to Herb Greenberg of CNBC. Greenberg added that the memory market remains tight.

In addition to the reasons stated above, Samsung, the main competitor of Micron Technology, Inc. (NASDAQ:MU), is struggling with a strong domestic currency, which is driving down profits as the last earnings call has shown.

“[…] I think this might be an opportunity [to buy Micron], I am not sure this is the falling knife you want to catch, until you get some more confidence in the broader tape, but certainly, it is shaping up to be an opportunity here” says Mr. Guana.

Micron Technology, Inc. (NASDAQ:MU) stock has had a good run so far this year, gaining 40%. On July 28, The Street reiterated its “Buy” rating for the stock, citing robust revenue growth, compelling growth in net income and notable return on equity.

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