Micron gets rare underweight rating

Micron Technology’s stock received a rare underweight rating. This is often because of the memory-chip maker’s heavy exposure to mobiles and PCs. Which is at a time when rising inflation forces consumers to rein in spending. Micron shares were down about 6% at $71.18. Piper Sandler said to the clients that with the worldwide economy expected to face headwinds. They’re concerned about Micron’s quite 50% exposure to consumer-like markets.
The company’s chip business that caters to the auto industry is anticipated by the brokerage to suffer. This is often due to the rising rates, a slowing economy, and also the possibility of an excess inventory build. Piper Sandler also added that the Dynamic Random-Access Memory (DRAM) market, represents over 70% of the company’s total revenue. Micron’s DRAM chips are widely utilized in data centres, personal computers and other devices.
The world PC shipments were down 4.3% within the half-moon of 2022. Global smartphone shipments are expected to say no 3.5% this year. Piper Sandler also said that the corporate has done a good job to scale back its cost structure and remain financially disciplined. They still view memory as largely a commodity market, compared to the remainder of their universe. Hence, thanks to this they feel that Micron is probably going to underperform. The brokerage expressed confidence within the company’s data centre business. It cut Micron’s price target by $20 to $70.