Micron Technology (NASDAQ:MU)
Micron Technology (NASDAQ:MU) stock dropped by more than two percent on Friday after Argus Research downgraded the memory chipmaker because it may incur “significant operational losses” in the years to come. As a result, Micron stock declined in the market.
Analyst Jim Kelleher lowered his rating on Micron (MU) from buy to hold, noting that the company is likely to see further weakness for memory chips, particularly for smartphones, and that this weakness is likely to move into other areas of technology, such as data centers. Kelleher also noted that this weakness is likely to move into other areas of the technology industry.
Kelleher went on to say that as a consequence of the weakening, Micron (MU) might be forced to contend with an “unfavorable environment” that is “expected to endure for many quarters.”
Micron (MU) published results for its fiscal first quarter earlier this month that were somewhat lower-than-expected and offered an exceedingly poor forecast for its second quarter. The outlook was given because the company expects its revenue to be much lower. Micron (MU) currently anticipates that it would incur a loss of anywhere from 52 cents to 72 cents per share, excluding the impact of any one-time events, on sales in the range of $3.6 billion to $4 billion.
Amidst signs of a faltering global economy, the corporation said it will lay off approximately 5,000 employees over the next year to “substantially reduce” its capital costs to preserve cash.
Micron (MU) Chief Executive Sanjay Mehrotra stated that the firm is “making significant efforts to minimize our supply and expenditures” and that it anticipates improvements in client inventories to improve, which would allow revenue to start expanding in the second half of next year. Micron (MU) is a semiconductor manufacturer.
In addition, Mehrotra expressed his conviction that Micron (MU) would be able to “provide excellent profitability after we get over this slump.”
Micron stock said that it anticipates “gradually improved demand patterns for memory” “over the next several months” as customer inventory levels continue to improve and new CPU platforms are released. China’s demand begins to recover as its economy reopens.
Despite this, even though the near-term forecast for Micron stock is unfavorable, the investing firm UBS has just designated the business as one of its top semiconductor stocks for 2023.
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Author Shariq Khan 
