MU Stock Rebounds As Micron Touts Technology Lead

Micron Technology (MU) says its innovations in memory chips will keep it several quarters ahead of competitors. Meanwhile, MU stock has rebounded from the recent stock market correction.

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“We have a lot of good momentum in bringing cutting-edge technology to market,” Sumit Sadana, executive vice president and chief business officer at Micron, told Investor’s Business Daily.

“We have industry-leading technology that is multiple quarters ahead of other competitors when it comes to the volume production of our 1-alpha DRAM and 176-layer Nand,” he said.

The Boise, Idaho-based company makes two main types of memory chips: DRAM and Nand. Dynamic random-access memory, or DRAM, accounted for 73% of Micron’s revenue in its fiscal first quarter ended Dec. 2. Nand flash memory accounted for 24% of its revenue during the period.

DRAM chips act as the main memory in PCs, servers and other devices, working closely with central processing units. Nand flash provides longer-term data storage.

Micron Driving Higher Chip Storage Density

Last month, Micron announced that it had begun volume shipments of 176-layer QLC Nand chips. QLC stands for “quad layer cell,” indicating 4 bits per cell. The rest of the memory chip industry is making TLC chips, or 3 bits per cell, Sadana said.

“More bits per cell allows for a lower cost structure and higher profitability,” Sadana said. “That kind of capability and technology allows us to stay significantly ahead of the rest of the industry.”

Next year, Micron expects to begin producing memory chips supporting Compute Express Link, or CXL, technology. CXL is an industry standard that will provide high-speed links between central processing units and system memory within data centers.

Because CXL technology will need an ecosystem of new hardware and software, it probably won’t ramp up until 2024 or 2025, Sadana said. Memory chips are increasingly important as artificial intelligence and machine learning take off, he said.

“In a lot of these highly configured servers that do AI workloads, more than half of the cost is in memory and storage alone,” Sadana said.

MU Stock Rebounds Off 200-Day Line

On the stock market today, MU stock fell 1.4% to 89.76 amid a down day for stocks overall. During the recent stock market sell-off, MU stock found support and bounced off its 200-day moving average line, according to IBD MarketSmith charts.

On Thursday, Evercore ISI analyst C.J. Muse reiterated his outperform rating on MU stock with a price target of 120. He called MU stock a “top pick.”

MU stock ranks third out of 10 stocks in IBD’s Computer-Data Storage industry group, according to IBD Stock Checkup. It has an IBD Composite Rating of 98 out of 99. IBD’s Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock’s strengths. The best growth stocks have a Composite Rating of 90 or better.

The data storage industry group ranks No. 27 out of 197 industry groups that IBD tracks. IBD trading guidelines recommend focusing on top-rated stocks in leading industry groups.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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