Micron Technology, Inc. (MU) has gained significantly in 2014 backed by its growth initiatives, product innovation and solid quarterly results. Notably, the company amassed a one-year return of approximately 61%.
Micron has been constantly innovating in memory technologies, spanning DRAM, NAND and NOR Flash memory solutions, which are being widely used in the latest mobile computing devices as well as in consumer, networking and embedded products. It is worth mentioning that Micron ranks as the #3 NAND supplier, according to IDC.
The company is positive about its product launches and growing demand for its products, particularly SSD products. The company is also optimistic about supply/demand balance for DRAM and NAND memory chips, which should support prices.
Additionally, we believe that the Elpida acquisition will help Micron in enhancing share in the memory market. The takeover also brought Apple Inc. (AAPL) on to the customer roster, which is a positive for future growth.
However, it may not be easy for Micron to capture share from SanDisk Corporation (SNDK) — a key NAND player. Nevertheless, with support from Apple and Intel Corporation (INTC) — its prime NAND customers — the situation could be in Micron’s favor, going forward.
Further, according to market research firm IHS' recently announced preliminary revenue forecast for 2014, the semiconductor industry has been one of the top performing industries. It states that the industry is on track to grow 9.4% to $353.2 billion in 2014, which will be the highest since 2010.
Moreover, according to World Semiconductor Trade Statistics (WSTS) and SEMI, the semiconductor market is expected to grow in 2015 assuming a further recovery in the global economy.
Also, it is noteworthy that Micron has surpassed the Zacks Consensus Estimate in three out of the last four quarters with an average positive surprise of 32.4%. In fourth-quarter fiscal 2014, the top line beat the Zacks Consensus Estimate while the bottom line matched the same. The results were primarily driven by improving market conditions as well as an encouraging operating performance.
Although past performances do not guarantee similar results this year, the underlying drivers remain strong, indicating that the stock will continue to grow in 2015.
Currently, Micron sports a Zacks Rank #1 (Strong Buy).
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