Micron Technology's stock received a rare"underweight" rating from a brokerage due to the memory-chip maker's heavy exposure to mobiles and PCs at a time when rising inflation forces consumers to rein in spending."With the global economy expected to face headwinds, we are concerned about Micron's more than 50 per cent exposure to consumer-like markets such as PCs, mobile, and other," Piper Sandler wrote in a note to clients.
The brokerage also expects the company's chip business that caters to the auto industry to suffer due to rising rates, a slowing economy, and the possibility of an excess inventory build. Piper Sandler added that the Dynamic Random Access Memory market, which represents over 70 per cent of the company's total revenue, had already started to see price declines for most configurations.Market research firm Counterpoint reported in April that global PC shipments were down 4.3 per cent in the first quarter of 2022, as the war in Ukraine and China's lockdowns pressured already fragile supply chains and added to shortages of components.
The brokerage, however, expressed confidence in the company's data centre business, which represents less than 30 per cent of revenue.