Can Micron Stock Recover in 2023?
Shares of digital memory chipmaker Micron Technology (NASDAQ: MU) are going to end 2022 on a sour note, and for good reason. The company is in the midst of a severe downturn as demand for memory chips falters. The reason? After a more-than-two-year spending spree spurred by work-from-home early in the pandemic, consumers aren't spending much on electronic devices these days. As a result, shares of the chipmaker have tanked 45% this year with just a few days to go until 2023.
Memory chips are a basic commodity used in all sorts of higher-order computing systems, which makes Micron's brand of manufacturing one of the most volatile businesses in the chip industry. Downturns like this current one are normal (though not usually quite this severe). Just like in times past, Micron will likely recover. But can that recovery happen in 2023?
Micron put in the hard work ahead of the pandemic to get itself better situated for the boom-bust cycle it is prone to. Under CEO Sanjay Mehrotra, Micron walked away from low profit-margin deals and focused instead on its more advanced memory manufacturing processes. As a result, revenue just barely peaked at record highs in 2021, and profits never quite reached the past-cycle highs. However, Micron's balance sheet was on solid footing headed into this crisis, and the company even began paying a dividend and repurchasing stock (more on that in a moment).
Source Fool.com
