MU Outpaced SNDK, WDC This Week: Now, Retail Traders Bet On Outlook Raise At Key Analyst Event

• MU stock gained 6.6% this week.
• Investors sold off SanDisk and Western Digital stocks after their results announcements.
• Retail sentiment for MU was ‘bearish’ on Sunday.

Micron Technology’s stock raced past peers SanDisk and Western Digital to notch weekly gains and investors are turning to its presentation at a key analyst event on Monday, during which some expect the company to adjust its forward guidance.

This week, investors sold off SanDisk and Western Digital stocks after their earnings results. SNDK declined 0.2% and WDC shed over 20%, while MU surged 6.6%. 

SanDisk and Western Digital reported another set of remarkable results. However, SanDisk’s first-quarter guidance came in short of Wall Street’s lofty expectations and weighed on the market sentiment for memory chipmakers, including Micron.

“Micron will be presenting tomorrow (August 10) at 10 am ET at the KeyBanc Capital Markets Technology Leadership Forum,” said a trader posted on Stocktwits. “Last year management raised guidance at this forum, and the stock popped 7.2%,” they said, adding that Micron stock could surge to around $950 on Monday.

Notably, Keybanc analyst John Vinh raised his price target for Micron to $1,750 from $1, 600 on July 14. Retail sentiment for Micron fell in the past week and was ‘bearish’ as of late Sunday, amid ‘low’ message volume.

Citi Cuts MU Stock Target

On Friday, Citi trimmed its price target on Micron stock to $1,150 from $1,400 while keeping a ‘Buy’ rating, citing “mixed” earnings from SanDisk and Western Digital and a more tempered outlook for DRAM and NAND pricing heading into next year

"We trim MU TP to $1,150 from $1,400 based on 8x P/E vs prior 10x times revised C27 EPS to reflect lower market multiples on mixed memory peer results," the Citi analyst wrote, according to the firm's investor note.

The revision came after Citi met with memory supply-chain players and third-party experts at the “Future of Memory and Storage” conference. The key takeaway was that pricing remains on an upward trajectory for both DRAM and NAND, but the momentum is beginning to ease.

"We see both DRAM and NAND prices decelerating Q/Q in the next four quarters with prices peaking in 2Q of next year," the analyst said. Memory stocks tend to move in line with expectations for memory prices over the next several quarters.

Micron Stock Move

Micron has become the bellwether memory chip stock in the U.S. market. Chipmakers’ shares have been under pressure lately, with wild swings in South Korea’s heavily Samsung Electronics- and SK Hynix-weighted market, along with SK Hynix’s Nasdaq listing last month, adding to volatility in the memory trade.

Micron stock plunged 29% in July, marking its worst monthly performance since June 2005, underscoring how investors are increasingly looking at the durability of the memory supercycle.

Micron stock is down 30% from its peak on June 25. Year to date, the shares remain 205% higher.

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