July 6th- Micron October 15th, 2021


October 15th, $90 Call, $2.99

A earnings sell-off opportunity, as have taken a good position size at $80. Micron reported a strong earnings beat last week, sending the stock from $85.47 to $78.89, and closing around $80 on Friday. Micron specializes in NAND, DRAM  both hot commodities in memory storage, as the digital transformation continues, worldwide.

Micron considers these 5 segments as their core business segments:

1) data center (15% growth through 2026)

2) personal computers (PCs)

3) mobile (^31%) 

4) graphics

5) auto (^24%)

All of these segments are at the forefront of the digital transformation and "new normal", however, there have been reports of slowing PC demand...

Micron reported revenue growth of ^36.5% YoY and $7.4B in revenue, beating estimates. More impressively their non-GAAP earnings more than doubled and were $0.26 cents higher than they guided Wall St. The risk with Micron stock is it is a memory company and historically these stocks have had boom and bust cycles, creating a environment where investors take profits. Micron also guided a strong fourth quarter guidance of $8.2B which indicates the memory market is not slowing down this year at a minimum. If that proves to be true, that will be a earnings double from a year earlier. 

Micron said DRAM growth is projected to be in the teens for the foreseeable future and NAND forecast is around 30%. 

Analysts have monster 12-month price targets on this stock at average target of $117.61 (46.41% higher).