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Wednesday, April 17, 2024

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Do you think a short term investment in Micron may be worth the risk? : stocks

Against my better judgement I bought some Micron shares today. Do you think it’s justifyable or a stupid gamble?

My reasoning for doing this is I hope they will report a positive earnings surprise on the 29th of March caused by buyers hoarding inventory due to uncertainty caused by the war in Ukraine and higher than expected DRAM and NAND prices. EPS should rise to around 7.50 which would push the PE ratio below 10 (at its current share price).

Potential catalyst: improvements in Ukraine, unrest in South Korea, escalations between North and South Korea, problems at Samsungs new EUV fab for ddr5 planned to open 2H 2022, COVID outbreak affecting competitors, cloud gaming news, AMD announcing new CPUs, rebound of tech stocks. The main risk I’m afraid of is Russia targetting US semis with sanctions and ristricting their access to inert gasses giving Samsung.

At this point I think it’s a pretty risky short term strategy. I’ll probably cut my losses at around $60. But Micron is becoming less cyclical and I think it’s well managed, so if the price drops further I might triple or quadruple my stake in steps and make it part of my portfolio with a long term horizon. I think there’s a startegy for that as well, but I won’t go into it now – I’ve read enough about DRAM for today…

Reports on DRAM and NAND market:

https://www.trendforce.com/presscenter/news/20220307-11150.html

https://www.trendforce.com/presscenter/news/20211213-11050.html


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