Micron Technology fell Friday, as investors were hesitant to buy South Korean memory brands and awaited the February employment data.
As US shares continued to fall amid the Iran Conflict, South Korean memory companies Samsung Electronics (SK Hynix) and Samsung Electronics (Samsung Electronics) also fell on the Korea Exchange.
Global memory sentiment drops Micron with a slash
Micron, the major manufacturer of DRAM chips and NAND, was trading 2% down at $389.12.
Samsung Electronics dropped 1.77% in Seoul to 188.200 won, and SK Hynix fell 1.81%, to 924,000 don.
CNBC’s Jim Cramer, who warned about the “South Korean spillover” into our markets earlier in the week, named Micron as one of “all still susceptible” stocks that he called.
The technical setup of the near-term catalyst
Micron, despite a gain of 344.77% in the past 12 months, is currently trading at 4% less than its simple moving average (20-day) of $406.13, but still remains 29.8% higher than its 100-day (SMA) of $300.60.
Its RSI reads 50.31, indicating neutral momentum.
On March 18, the company will report its earnings. The Street expects EPS to be $8.56 (up from $1.56 a year ago) and revenues of $19.10 Billion, an increase from $8.05 Billion a year ago.
Views and opinions of analysts
Micron has a Buy Rating with an average target price of $377.
UBS raised its target price to $475 in March, Stifel increased to $550 the same day and Needham went up to $450 February 17.
The 37.7x multiple reflects an overvaluation of the stock ahead of its earnings.
Western Digital’s recovery and its risks
Western Digital is a leading provider of HDDs and SSDs. The company has also seen its business improve, as storage cycles are increasing and revenues have returned to positive growth.
Seeking Alpha reports that the stock has risen about 60% over the past year. A recent earnings report suggests the rise could continue, with a potential gain of up to 40% in the coming 12 months.
By diversifying their supply chain, the company was able to overcome supply issues related to semiconductor shortages. They also expanded capacity and benefited from AI and cloud computing demand.
Concentration, multiplicities, and momentum
Western Digital has seen its margins increase since the recession.
The valuation is high at 27x EBITDA and 7.2x Sales, based on the expectation of durable AI.
Three clients account for 46 percent of the H1 revenue in FY26, which exposes results to hyperscaler implementation cycles.
The stock is rated as Hold by the analysis, which argues that multiples at current prices are based on near-perfect performance that could be hard to maintain in an historically cyclical sector.
Takeaway
Micron’s drop shows how memory changes in South Korea can have a ripple effect on US markets, as an earnings report with sharply increased estimates is approaching.
Western Digital’s recovery shows the improving cycle in this sector and AI-driven demands, but high valuations and customer focus leave little room to be disappointed.
The post Micron stocks fall as global memory sector weakens may be updated as new information becomes available
This site is for entertainment only. Click here to read more
