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like many stocks micron stock price has decreased dramatically on fears of consumer spending decreasing unfortunately micron has also seen an influx of price target reduction by analysts that i believe is fueling that fear unfortunately on today's episode i am gonna try to explain why i believe things might get worse for micron before they get better but i do believe there's plenty of bullish points for micron check out my new micron stock price right now sitting at 55.75 it is insane because from its 52-week high the stock almost reached 100 and we can see the stock is down roughly 42 percent from its 52-week high right now sitting at a market cap of 62 billion dollars so for those not familiar with micron micron is a company that produces memory and computer data storage that is pretty much used in any type of device we are using today from our phones cameras tvs data centers computer laptops the list goes vehicles the list goes on and on so like i mentioned the past two to three weeks we have seen an influx of analysts downgrading or reducing the price target of micron here we can see on june 13 uh summit insights downgraded the stock to a hold from above we also see on june 13th ubs adjusted microns price target to 115 from 120 dollars we also see on june 6 citigroup adjusted microns technology price target to 100 from 120.
piper sandler was probably one of the biggest ones that cut micron on june 3rd from 90 dollars to 70 dollars and the reason being is analyst harsh kumar expresses a huge concern about microns revenue and how it is heavily exposed to consumer-like markets and as we continue to see a huge fears of consumer spending decreasing and unfortunately today there was a research that brought a little bit more bearish news for microns consumer market but as i am gonna explain later on in this episode there are bullish points for this company right now like the data center segment so there was a trend force research that kind of shows that even though we are the peak season of kind of products and the rising ddr5 penetration the third quarter of 2022 dram market is gonna have some negative impact due to weak consumer electronics demand and this is something we have been seeing and something we have definitely been discussing in the semiconductor industry where the consumer market at the moment is definitely seeing some form of a slowdown one of the biggest reasons is dram inventory has actually increased dramatically in a lot of these companies so instead of purchasing some more memory from microns or some of these other players they're going to try to use their inventory first because some of these oems some of these companies that create phones that create laptops they don't want to spend money because they fear that consumers are not going to buy the products right now so they want to reduce their inventory levels as soon as possible in this chart with sources from trend force we can see where some of the biggest downgrades are coming in prices i do want to say most of the consumer products are seeing a decrease of zero to five percent in the second quarter of this year and continue to see more of a decrease in the upcoming quarter right we can see pc mobile and kind of consumer products down a few markets that don't seem to be down too much is first the server dram and these are things being used by data centers enterprises and cloud providers so we can see this market is not expected to decrease dramatically which shows that hey the cloud market the data center market is still at least healthy enough for prices not to go down the other one that we did not see it down too too much is the graphics market that's actually up a bit in second quarter of 2022 and it's expected to decrease a little bit in third quarter i do believe one of the main reasons is we are seeing nvidia amd and intel all kind of releasing or expected to release the next generation of graphics cards within the next few months which i do believe is keeping a nice healthy amount of demand in the graphics memory department as well but even though there is the data center market growth the consumer market is still a very important portion for micron here during their investor day they kind of showed us the market size of their calendar year of 2021 and we can see mobile pc and auto as of calendar year of 2021 make up more most of the kind of total addressable market for micron even though data center is a big portion the consumer market continues to outweigh it if you add all the consumer products and here we take a closer look at the company's actual revenue by business unit we can see in the most recent quarter mobile is a huge important portion compute and networking and storage this could be a mixture of both data centers and kind of consumer computer products also play an important role so at the end of the day um the consumer market at the moment is very very important for micron they did share some form of insight of their upcoming quarter they believe they'll have about seven point eight billion dollars in revenue that would be one percent up quarter over quarter and about 25 year over year fortunate for investors we don't have to wait much too much more longer to understand what's really happening for semiconductor markets right now as micron is expected to report their third quarter results on june 30th of 2022 so roughly 10 days from now like i mentioned i do believe in the short term especially because of the consumer spending micron and other semiconductors might experience short term pain but i do believe in the long term if we take a closer look at this chart some of the biggest growers are data centers are the automobile or the industrials and these are reasons why i believe to be bullish for micron in the long term of things and that's why as long-term investors we do have that kind of advantage compared to some of these analysts a lot of these endless price targets are for the next 12 months maybe even shorter and for that reasons they really have to pay attention to short-term pain opposed to long investors where we can kind of write out the noise and at the moment i do not own micron stock but i did not know the stock price had dropped to 55 at the moment so if prices continue at this level by the end of this week i do believe that micron has a high probability of entering my portfolio so i hope you guys enjoyed today's episode take care have a good day and see you next time
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