(Reuters) - Micron Technology Inc’s shares jumped 15 percent on Thursday after investors looked past limp quarterly results and focused on a potential 2012 rebound in long-stagnant memory chip demand and prices.
Micron on Wednesday posted lower-than-expected results saying flooding in Thailand — a major production center for hard drives and the components that go in them — had slashed demand for basic memory chips 10 to 15 percent. But Wall Street analysts foresaw a bounceback next year as hard-drive shortages alleviate.
Wedbush Morgan upgraded Micron stock to “outperform” from “neutral,” while Raymond James analyst Hans Mosesmann reiterated his strong “buy” position, arguing the worst of the market doldrums could be behind Micron and the company should ride fatter margins next year.
“We see more reason for optimism in FY12, as the current DRAM pricing dynamic is not sustainable; the worst of the HDD- related shortages are seemingly in the past” and higher-margin flash memory takes up a larger portion of sales, Mosesmann said.
Stock in Micron, the last U.S. DRAM manufacturer, soared as much as 16 percent in early trading, and was up 14.3 percent at $6.33 in the late morning.
Reporting by Edwin Chan, editing by Maureen Bavdek