Latest news with #DRAM
Globe and Mail
a day ago
- Business
- Globe and Mail
Micron's Big Q3 Drives Applied Materials' Bullish Outlook
Micron Technology's (NASDAQ: MU) recent fiscal Q3 2025 earnings are some of the best seen in the semiconductor industry over the past several months. This is good news for one of the company's major suppliers, semiconductor equipment giant Applied Materials (NASDAQ: AMAT). Micron's earnings show trends that are likely to boost demand for Applied Materials' equipment. Below is a deep dive into Micron's results and Applied's business that will demonstrate how the firm can benefit. We'll further examine Applied's positioning and valuation to understand if the stock represents a strong forward-looking investment opportunity. Micron's Results Back Up Applied's Bullish Outlook Micron crushed sales and adjusted earnings per share (EPS) estimates in its latest results. The memory chip maker's dynamic random-access memory (DRAM) sales were the driving force behind its great quarter. This was particularly true for its high-bandwidth memory (HBM) products, where sales grew by 50% in just one quarter. HBM is a type of DRAM that is particularly advanced and is ideal for AI data center applications. Another very strong part of the report was that Micron increased its overall DRAM sales growth guidance for calendar 2025 from 'mid-teens' to " high-teens." The company also expects that HBM sales will increase 'significantly faster' than overall DRAM sales. So, where does Applied Materials come into play? Well, it just so happens that DRAM is one of Applied Materials' most important businesses. Last quarter, DRAM equipment sales made up 27% of the company's total revenue. Micron's strong DRAM sales mean they will likely need to buy more of Applied's equipment used to make it, which could greatly benefit Applied's overall sales. Micron's results add significant weight to Applied's optimistic statements on DRAM demand. On May 15, Applied said it expects 'advanced DRAM' equipment sales to grow by 40% in 2025 as customers ' ramp investments ' in these technologies. Advanced DRAM includes HBM but also DDR5. DDR5 is also used significantly in AI in data centers and attracts demand from high-performance PCs. Recent announcements from Micron support Applied's statements that investment in DDR5 will ramp up. In June, Micron said it would soon end production of DDR4, the predecessor to DDR5. Micron's information boosts confidence in what Applied has already shared. This positions the company for strong growth ahead. AMAT: The Chip Advancement Enabler Apart from the specific examples laid out above, one thing about Applied Materials is particularly important to understand. The advancements in its technology make the advancements in Micron's technology possible. As NVIDIA (NASDAQ: NVDA) and other end buyers want better Micron chips, Micron will need more advanced gear from Applied. This is true for Micron and for other companies that manufacture different types of semiconductors. Think Taiwan Semiconductor Manufacturing (NYSE: TSM). Applied's position near the beginning of this supply chain is an advantage that makes it one of the best ways to gain exposure to the AI revolution. In the coming years, it can benefit from advances in all types of semiconductor chips. Many other companies focus on just one or a few areas. This is also true for Applied, as the company makes equipment for various chip-making processes. It can offer customers a range of solutions that fit many of their needs. Meanwhile, ASML (NASDAQ: ASML), for example, focuses almost solely on lithography equipment. Despite China, Applied Remains Set Up for Long-Term Success Given export restrictions, Applied's exposure to China is important to discuss. Last quarter, 25% of Applied's revenues came from China. This is down from 43% from a year ago, largely due to export controls. Still, the company notes that nearly all of its business in China involves 'mature' or less advanced technologies. Thus, the company's growth prospects based on technological advancement are not much tied to China, a positive sign for the long-term future. As of the July 2 close, Applied Materials trades at a forward price-to-earnings multiple of 20x. That compares to its three-year average figure of 19x. This suggests that based on next 12 months' estimates, the stock is neither greatly overvalued nor greatly undervalued. Thus, expecting to pick up big returns from this stock quickly may be unrealistic. However, on a long-term horizon, the stock remains strongly positioned to appreciate. Years of upcoming chip advancement, which Applied's tech facilitates, can drive this. Where Should You Invest $1,000 Right Now? Before you make your next trade, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list.
Yahoo
3 days ago
- Business
- Yahoo
Rosenblatt Securities Raises Micron's Price Target to Street-High of $200, Reiterates Buy Rating
Micron Technology, Inc. (NASDAQ:MU) is one of the . On June 26, Rosenblatt Securities raised the price target on MU from $172 to a Street-high of $200, reiterating a Buy rating on the stock. Kevin Cassidy from Rosenblatt Securities raised the price target on Micron Technology, Inc. (NASDAQ:MU) following strong Q3 2025 results. The company's revenue hit a quarterly record of $9.3 billion, up 37% year-over-year, and surpassed consensus by almost $450 million. The strong revenue was driven by ongoing strength in data center markets and robust quarter-over-quarter growth across consumer-facing segments. The company saw a record-high DRAM revenue, with almost 50% sequential growth in HBM sales. Micron's adjusted gross margin soared to 39% in Q3, while the adjusted earnings of $1.91 surpassed consensus by $0.31. Manczurov/ 'The combination of AI applications driving DRAM demand and Micron's leading power efficiency drove revenue, gross margin, operating margins, and profits well above Street expectations,' said Cassidy. 'Outlook is for more of the same. With DRAM wafer capacity expansion over 18 months away, we see this cycle driving Micron's income model to all-time highs. We continue recommending MU shares for the relatively low valuation, 12x fP/E, strong balance sheet, expanding margins, and earnings leverage.' Micron Technology now expects Q4 FY2025 to post similar results with an equally upbeat outlook. The revenue for the ongoing quarter is expected to be around $10.4 billion and $11 billion. Micron Technology, Inc. (NASDAQ:MU) is a leading player in the AI industry as the company develops high-performance memory and storage solutions, such as DRAM and NAND. These are important devices used for running and training AI models across data centers, consumer electronics, and edge devices. While we acknowledge the potential of MU as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
29-06-2025
- Business
- Yahoo
Is Micron (MU) the Next Big Winner in AI Memory? Analysts Think So
Micron Technology, Inc. (NASDAQ:MU) is one of the . On June 26, UBS raised the firm's price target on the stock to $155 from $120 and kept a 'Buy' rating on the shares. In a research note, the analyst told investors how Micron has delivered HBM revenue and gross margin that met or slightly exceeded investor expectations. 'MU delivered against the only real investor expectations we heard into the call – HBM [high bandwidth memory] revenue and gross margin, both of which were in-line to a little better than bogeys.' A close up of a circuit board, its microchips creating a powerful computing system. The company also boasts a strong financial position as demonstrated by its robust liquidity. With HBM becoming an important part of the DRAM business, it represents 6-7% of DRAM bits. However, they take up around 19-20% of production space as per UBS estimates, which is why Micron focuses on selling these chips to higher-value markets. UBS believes that the supply-constraint dynamics will stay until 2026, until Micron and its peers install new manufacturing capacity. The firm thinks this will be done 'carefully and strategically' in order to maintain favorable market conditions. Micron Technology, Inc. (NASDAQ:MU) develops and sells memory and storage products for data centers, mobile devices, and various industries worldwide. While we acknowledge the potential of MU as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 10 AI Stocks in the Spotlight and . Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
28-06-2025
- Business
- Yahoo
Micron Surges on Record Q3 Revenue; AI Demand Lifts Outlook
Micron (MU, Financials) reported record third-quarter revenue of $9.3 billion Wednesday; the 37% year-over-year jump was powered by demand for AI-driven memory products, especially in the data center segment. DRAM sales made up 76% of total revenue at $7.1 billion; high-bandwidth memory also surged nearly 50% sequentially. Warning! GuruFocus has detected 7 Warning Sign with MU. The company posted adjusted EPS of $1.91; analysts had expected $1.60. Margins widened to 39%, reflecting stronger operational execution. Looking ahead, Micron guided for Q4 revenue between $10.4 and $11.0 billion; EPS is expected to land between $2.35 and $2.65well above Wall Street forecasts. Free cash flow came in at $1.95 billion; HBM4 chips are now in development for 2026. Management pointed to tight DRAM supply and improving NAND inventory as tailwinds; analysts cautioned, however, that tariff-related stockpiling could skew future results. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Miami Herald
26-06-2025
- Business
- Miami Herald
Analysis: SK Group becomes most profitable conglomerate in Korea
June 26 (UPI) -- SK Group has emerged as the most profitable conglomerate in South Korea thanks to the stellar performance of its key affiliate SK hynix, the world's No. 2 memory chipmaker. According to Seoul-based business tracker CXO Institute on Wednesday, SK Group's subsidiaries recorded $20 billion in operating profit last year, surpassing Samsung Group's $19.9 billion. This means that Samsung Group, a perennial leader in profitability, has now failed to claim the top spot for two consecutive years. In 2023, Hyundai Motor Group led the rankings for operating income. "Throughout last year, SK hynix single-handedly carried SK Group. And the trend is expected to continue this year, which means SK Group may become the most profitable company for two straight years," CXO Institute chief Oh Il-sun told UPI. Lee Phil-sang, an adviser at Aju Research Institute of Corporate Management and former Seoul National University economics professor, echoed that view. "Samsung Electronics is putting forth great efforts to catch up in next-generation chips, but it will take some time. SK hynix is projected to be more profitable than Samsung Electronics this year," he said in a phone interview. Driven by the booming sales of high-bandwidth memory (HBM) chips, which are used for AI applications or supercomputers, SK hynix delivered record-breaking profits in 2024. Its operating profit reached $17 billion, accounting for 85% of SK Group's total, a dramatic turnaround from its $5.68 billion operating loss in 2023. In the first quarter of this year alone, SK hynix chalked up $5.48 billion in operating profit. Based on the impressive results, the company's market capitalization topped $150 billion this week for the first time, trailing only Samsung Electronics' $262 billion. The latter is the world's largest manufacturer of memory chips and smartphones. Despite SK's current edge, some watchers believe that Samsung Group may reclaim the top position this year as the prices of DRAM, a major product of Samsung Electronics, show signs of recovery. "From the third quarter, technology and sales are expected to gradually normalize," Daishin Securities analyst Ryu Hyung-keun noted in a recent report. "While it won't be easy to restore technological competitiveness in a short period, the strategic shift should begin to yield signs of improvement in the second half." Samsung Electronics posted $4.9 billion in operating profit during the first three months of 2025, up 1.2% year-on-year. When it comes to 2024 sales, Samsung Group was the runaway leader with $294 billion, far ahead of $215 billion of Hyundai Motor Group and $152 billion of SK Group. Samsung Group also led in employment as more than 280,000 workers were on its payroll, compared to around 200,000 for Hyundai Motor Group and 150,000 for LG Group. In terms of per-capita turnover, Mirae Asset Group was atop the list with $2.7 million. It is one of the biggest financial conglomerates here, focusing on asset management, brokerage, investment banking, and insurance. "We can say that Mirae Asset workers generated the largest added values on average last year. In other words, the group wins out in efficiency," CXO Institute's Oh said. By contrast, LG Group struggled to find its feet last year as the outfit failed to remain profitable. The Seoul-based group logged $392 million in operating loss, up 38% from a year before. "LG Group has been languishing because its main unit LG Energy Solution faced a double whammy of the electric car chasm and the intensifying competition from Chinese players," said economic commentator Kim Kyeong-joon, formerly vice chairman at Deloitte Consulting Korea. "The group should address both issues to rebound, which is not an easy task," he added. The term EV chasm refers to the weaker-than-expected demand for electric cars in recent years due to the gap between early adopters and mass market consumers. LG Energy Solution is one of the world's foremost EV battery producers. Copyright 2025 UPI News Corporation. All Rights Reserved.
