Futures point higher; AMD reports; Novo to cut costs - what’s moving markets
On Thursday, Rosenblatt Securities provided insights into the memory industry, highlighting several factors that are expected to drive demand. SK Hynix, a key player in the sector, reported first-quarter revenue of $12.3 billion, a decline of 11% quarter-over-quarter but a significant increase of 42% year-over-year, surpassing the consensus estimate of $12.1 billion. According to InvestingPro data, fellow industry leader Micron Technology has shown impressive revenue growth of 71% over the last twelve months, with current revenue standing at $31.3 billion. The first quarter is traditionally a weaker period for the industry; however, the management of SK Hynix noted several positive developments.
The company benefited from consumer electronics subsidies in China, heightened competition in AI development, and some inventory restocking. Looking forward, demand is anticipated to grow due to the end of support for Windows 10, the increasing use of AI in PCs, the need for higher performance memory, greater adoption of AI features in smartphones, and a surge in server demand.
SK Hynix forecasts a substantial 50% annual growth in demand for High Bandwidth (NASDAQ:BAND) Memory (HBM) from 2024 to 2028. Additionally, the management pointed out that the emergence of efficient open-source AI models, such as DeepSeek, is expected to further stimulate the server market.
Rosenblatt analysts view these demand drivers as favorable for the memory industry overall. The firm specifically mentioned its positive outlook for Micron Technology (NASDAQ:MU) and Rambus Inc . (NASDAQ:RMBS), indicating that these companies could benefit from the current trends and demand growth in the memory sector. The analysts’ comments reflect optimism about the potential for these stocks amid the evolving industry landscape. For a comprehensive analysis of Micron’s market position and growth prospects, access the detailed Pro Research Report available exclusively on InvestingPro, covering over 1,400 top US stocks.
In other recent news, Micron Technology announced a strategic reorganization into four market segment-focused business units to capitalize on AI-driven growth opportunities. This restructuring is set to be completed by the start of the company’s fiscal fourth quarter in 2025. Meanwhile, Micron’s efforts to offset tariff costs by imposing surcharges on certain U.S. products have been met with investor optimism, as reflected in the recent rise in the company’s stock. JPMorgan analysts highlighted Micron’s minimal exposure to Chinese regulatory restrictions, suggesting that demand for high-bandwidth memory remains strong despite these challenges. Citi has reiterated its Buy rating on Micron shares, maintaining a $120 price target, following TrendForce’s updated forecasts for favorable DRAM and NAND pricing trends. These projections suggest potential financial benefits for Micron as demand increases and supply constraints ease. Furthermore, Lynx Equity’s positive outlook on Micron, alongside NVIDIA (NASDAQ:NVDA), emphasizes the resilience and adaptability of these companies in the face of global market shifts.
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