Memory stocks have rallied sharply on expectations of tight supply and higher pricing, but investors may want to look beyond high-bandwidth memory exposure ahead of Micron Technology’s (MU) earnings on Wednesday.
During a recent Seeking Alpha Investing Expert podcast, Sara
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Quick Insights
Non-HBM memory pricing trends are critical to Micron's gross margins since these products currently have higher margins than HBM, and recent moderation in non-HBM players' growth may pressure Micron's future profitability.
New Chinese memory supply and weakening PC and smartphone demand may pressure non-HBM pricing, which could reduce sector profitability if the trends persist.
Gross-margin guidance serves as an indicator of whether strong memory pricing can continue supporting Micron's profitability, and any signs of margin weakness may trigger a negative market reaction.