Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of semiconductor company Micron Technology, (NASDAQ:MU) popped 10% today after its quarterly results easily topped Wall Street estimates.
So what: The stock has skyrocketed over the past year on better-than-expected growth, and today's Q1 results -- EPS spiked 165% on a revenue surge of 120% -- only reinforce that trend. In fact, DRAM sales soared 69% year over year while gross margins improved to 32% (from 25% in Q4), suggesting that the industry is starting to lend itself to long-term profitability.
Now what: Management expects conditions in the memory space to remain favorable. "In terms of DRAM, the fire at Hynix Wuxi fab last fall coupled with what was a healthy supply demand situation beforehand is resulting in significant reductions in inventory across the DRAM supply chain, in particular for the PC and mobile segments," said CEO Mark Durcan in a conference call. "Our belief is that this tight and further declining inventory situation coupled with balanced long-term production and demand to continue to drive healthy market conditions." Of course, with Micron shares now up a whopping 230% from its 52-week lows, much of that bullish outlook might already be baked well into the valuation.
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