Where Will Micron Technology Be in 1 Year?
Memory-chip maker Micron Technology (NASDAQ: MU) is widely known as a cyclical stock. The company's revenue tends to ebb and flow in predictable multiyear patterns, dragging cash flows and stock prices along for the ride. Here, in the middle of the COVID-19 health crisis, Micron's top-line sales are poised to bounce off another market bottom and swing back up again. We've seen this thing before, but everything is actually different this time.
Let's talk about the novel coronavirus first. The disease knocked Micron's operations for a loop in March when an important chip-packaging facility was shut down under a martial law order for a couple of weeks. The assembly line is back in action since Malaysia added semiconductor factories to the list of essential services, but it is running at a fraction of its normal volume capacity and Micron has shifted most of this site's operations to other packaging plants around the world. That's a direct benefit from running a worldwide manufacturing network and Micron would not have had this option available a couple of market cycles ago.
The coronavirus pandemic has also changed the end-market demand for some of Micron's products. Lower consumer demand for smartphone memory chips and other memory-toting consumer electronics is balanced by higher memory-chip demands in corporate data centers. All those cloud-based services that come into play when people work and play online, often from home, depend on beefy data center facilities.
Source Fool.com
