The stock of Micron Technology, Inc (NASDAQ:MU) closed at $52.59 gaining 1.82% in yesterday’s trading session. It is a downtime for this business giant after its shares declined by almost 14% and that was over a period of five days.
A number of market observers have moved forward to give their perspective outlining that the reason might have been that the quarterly earnings report wasn’t found impressive by the various investors who were filled with high expectations. For many years they had recognized the maker of memory chips as a great performer that would always give them value for their money.
The significant tech sell-off witnessed this week hasn’t saved the company’s stock from being beaten down. Several analysts have come forward to warn Wall Street to stop with its act of underestimating the strength of the trend in NAND and DRAM flash chips which happened to be two of the biggest businesses for the business guru.
Romit Shah, who happens to be an Instinet analyst, has proceeded to term the chips a “choke point” of all forms of computing. He added that he was very much aware of the spike in demand in line with the crucial components and much is happening at the moment as enterprises make efforts to swift shift from the premise systems to the cloud.
It is worth noting that the tight supply and the high demand for DRAM memory flash sold by NVIDIA Corporation (NASDAQ:NVDA) are the ones that resulted in the inflated prices for the various semiconductor makers around the globe. The Instinet analyst takes a strong stand that the environment has catered for a significant improvement in terms of the operating margins.
Quite a large number of people observe ASP growth in data center, memory and analog as what it takes to push for customer economics and the target right now is to expand the operating margin across the entire industry.
Shah opined, “A look at operating margins of 37 publicly traded semiconductor companies over the last 10 years shows that the median operating margin reached a high in 2017 with continued expansion forecasted in 2018,”