Alex Gauna, an analyst at UBS, says he came away from a chat yesterday with the Micron (NASDAQ:MU) investor relations group “incrementally less enthusiastic than we had been previously.” In a note Wednesday morning, Gauna raised issues about both DRAM and NAND flash memories:
Our concerns surround the company downplaying flexibility and opportunity in DRAM product areas where pricing continues along its considerable strengthening trend,” he writes. “The company also sounded incrementally less upbeat on NAND prospects given the exaggerated levels of pricing declines seen over the course of the year. While it is not new that NAND pricing has been under pressure, we would have thought Micron’s new capacity coming online would have made for a more favorable assessment of pending quarter prospects rather than the downplaying we received. Micron noted that DRAM strengthening came too late to have any meaningful impact on August quarter results and there has been little room to grow bit output given resource allocation shifts.
Concludes Gauna: “We find ourselves wondering how long the market will be willing to wait for Micron to start realizing some of the better growth prospects inherent in its end markets.”
Micron on Wednesday fell 48 cents to $17.99.