Micron Technology (NASDAQ:MU) is exhibiting the “typical signals” of a bottom, according to investment company Citi, as semiconductor stocks climbed on Wednesday, driven by increases in businesses connected to smartphones.
Foxconn (OTCPK:FXCOF), the company that makes Apple’s (AAPL) iPhone, said on Wednesday that total revenue will increase this year despite a sluggish demand for smartphones. Rising inflation would, however, largely have no effect on midrange and high-end smartphones.
On Wednesday, semiconductor stocks Qualcomm (NASDAQ:QCOM) climbed more than 2%, while Skyworks Solutions (NASDAQ:SWKS) and Qorvo (NASDAQ:QRVO), who also provide semiconductors for the iPhone, increased by more than 3.5% and 5.5%, respectively.
The Z Flip 4 and Z Fold 4 will be powered by Qualcomm (NASDAQ:QCOM), the company that supplies modem chips for the iPhone. Samsung (OTCPK:SSNLF) will use these two new smartphones.
Semiconductor Stock Micron Showing Signs of a Bottom
In midday trading, Micron (NASDAQ:MU) rose more than 3% as Citi stated that the business has displayed the three indicators of a bottom: it has reduced its capex spending, it is trading at or near a low valuation, and it has the majority of its downside already factored into consensus projections.
Analyst Christopher Danely said in a letter to clients that much of the downside to consensus expectations will be out following yesterday’s news of a weaker-than-expected outlook.
He added that the Fiscal 2023 EPS estimate is down about 50% from last quarter.
The business is at the core of the ongoing PC demand and inventory maelstrom, according to Baird analyst Tristan Gerra.
Gerra has a neutral rating on Micron (NASDAQ:MU), citing its disproportionate exposure to the PC industry and sensitivity to memory pricing.
Is L-Shaped Recovery Coming for Semiconductor Stocks?
Gerra stated in a note to clients that he believes the combination of 20+ year high inventory days in the PC supply chain and a structural demand shift away from home electronics to outdoor recreation points to an L-shaped recovery in PCs with demand likely being quite muted in 2023.
Even though it was reported that China has not yet begun its examination of Intel’s planned acquisition of Tower Semiconductor, shares of Intel (NASDAQ:INTC) increased by more than 1.5%.
Other semiconductor stocks such as Nvidia (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD), Texas Instruments (NASDAQ:TXN), Analog Devices (NASDAQ:ADI), and Broadcom (NASDAQ:AVGO) also experienced significant advances in early trading on Wednesday.
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