Micron Technology, Inc. (MU): Why This Stock Should Continue Its Blazing Run Post Earnings

And then, the proposed takeover of Elpida Memory, which has been inching closer to completion, should provide it more pricing power and a choice account in the form of Apple Inc. (NASDAQ:AAPL). Elpida was one of the suppliers to Apple Inc. (NASDAQ:AAPL) a couple of years back and Micron itself had mentioned over the previous earnings call that it counts top two smartphone makers as its clients.

Now, if the company has indeed been chosen as a supplier for the upcoming iPhone, then we should see better revenue going forward. Apple had diversified its supply lines for the iPhone 5 and Elpida was one of the winners, with Apple Inc. (NASDAQ:AAPL) probably using different suppliers.

As Apple looks to reduce its reliance on Samsung for components and Elpida having already supplied DRAM to the iPhone maker, Micron’s chances of benefiting from the booming mobile DRAM market look very bright.

And then, as I’d mentioned earlier, rising demand for NAND memory along with low supply should continue to support prices. As flash memory maker SanDisk Corporation (NASDAQ:SNDK)’s CEO, Sanjay Mehrotra, had pointed out last month, chipmakers haven’t been bumping up their capacities even though demand has been increasing. SanDisk Corporation (NASDAQ:SNDK) itself will be keeping its capacity additions below the industry average and as such, it sees stable NAND pricing.

Moreover, SanDisk Corporation (NASDAQ:SNDK) had upped its revenue forecast when it last reported earnings, suggesting that the company is well-placed to benefit from the dynamics of the NAND market.

Thus, Micron Technology, Inc. (NASDAQ:MU)’s management should once again roll out a string of positives on the upcoming conference call as we enter the second half of the year where its products should typically be more in demand considering the ramp up in the production of new devices.

The stage is set for Micron Technology, Inc. (NASDAQ:MU) to provide yet another thrust to its stock price and continue its journey north; and there is a good probability that the company would deliver. Tune into this space again next week for the complete analysis of Micron’s earnings and for more insight regarding its prospects going forward.

The article Why This Stock Should Continue Its Blazing Run Post Earnings originally appeared on Fool.com and is written by Harsh Chauhan.

Harsh Chauhan has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Harsh is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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