Still Up In The Air As To Whether Micron’s 3D XPoint Technology Will Be A Major Hit Or Not?
Apart from favorable pricing conditions in 2017, there seems to be major optimism regarding Micron’s 3D Xpoint technology (2). This stems from the fact that Micron Technology, Inc. (NASDAQ:MU) is expected to launch its technology before Intel’s which many investors believe is pivotal. However, I would caution investors here that despite the probable launch of an SSD (under the QuantX brand) this year, Micron is not expected to see any meaningful revenues here until 2020. In saying this, investors seem excited as Apple Inc. (NASDAQ:AAPL) and International Business Machines Corp. (NYSE:IBM) are already using this technology and, more importantly, that the technology is being targeted for the high-growth data center environment.
3D Xpoint (3) is up to a thousand times faster than traditional NAND but we still do not know if the technology will be successful in the market. To be debating on whether to invest in Micron because of this technology is too risky in my opinion. Why? Because the 3 to 4 year lead time is just too long and will allow Micron’s competitors to keep working on their own technologies. Case and point – A lot of things still need to go right with relation to Micron’s 3D Xpoint for the company to hit a home-run here in years to come
Technically The Stock Looks Overbought Here
Micron Technology, Inc. (NASDAQ:MU) is a highly cyclical stock, one can definitely use technical analysis to help in making an investment decision. If we look at a weekly chart, we can see that Micron share price got absolutely hammered in the great recession back in 2008 & 2009. However, investors believe that due to favorable tailwinds, the share price could rise vertically like it did between the years of 2013 and 2015. Nevertheless, the weekly stochastics and RSI indicator look pretty overbought here. Can they remain overbought for a significant period of time? Yes, but the risk has to be to the downside here as equity markets in the US are far higher now than they were back in 2014. If one still likes Micron, the safest bet would be to wait until the technical indicators become oversold once again.
Summary
Micron’s sentiment is sky high at present after its impressive first quarter earnings report. The company “appears” to have plenty of tailwinds at its disposal but we all know that this sector can turn on a dime. I would be looking for a far better entry here as I believe that the easy money has already been made in Micron last year.
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The article Will Micron Technology, Inc. (MU) Stock Continue To Ride Bullish Expectations? originally appeared on amigobulls.com. Watch our analysis video on MU
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Additional Links:
(1) http://www.investors.com/news/technology/micron-technology-stock-jumps-on-q1-earnings-beat/?ref=il
(2) http://marketrealist.com/2017/01/will-win-3d-xpoint-race-intel-micron/?ref=il
(3) http://seekingalpha.com/article/4033837-micron-3d-xpoint-disruptive-long-term-catalyst?ref=il
