2020 has been a loopy yr for traders, and the large bear market that got here within the first quarter obtained largely reversed by the strongest upward transfer in 1 / 4 in additional than 20 years. The Dow Jones Industrial Common (DJINDICES:^DJI), S&P 500 (SNPINDEX:^SPX), and Nasdaq Composite all moved greater as market individuals ignored uncertainties associated to the coronavirus pandemic and as an alternative targeted on the prospects for companies to maneuver ahead and begin rising once more.
As we speak’s stock market
Index
Proportion Change
Level Change
Dow
0.85%
217
S&P 500
1.54%
47
Nasdaq Composite
1.87%
185
Knowledge supply: Yahoo! Finance.
Semiconductor stocks had been among the many strongest performers, serving to to provide the Nasdaq an outsized achieve in comparison with its fellow main market benchmarks. Micron Expertise (NASDAQ:MU) was the large winner on a strong earnings efficiency, however different stocks within the trade additionally managed to publish good beneficial properties as nicely.
Micron’s earnings win
Micron Expertise noticed its stock rise nearly 5% after the chipmaker launched its fiscal third-quarter monetary outcomes. The numbers weren’t fully optimistic, however they nonetheless confirmed how nicely the corporate held up through the worst of the pandemic to date.
Micron’s income climbed nearly 14% through the interval in comparison with the year-earlier quarter. Nevertheless, greater prices of products offered value the corporate greater than six share factors of gross margin. That, together with greater working bills as nicely, contributed to a 21% drop in adjusted internet revenue.
Nonetheless, most traders had anticipated far worse from Micron. Furthermore, the chipmaker stated that it anticipates year-over-year progress accelerating within the fiscal fourth quarter to 23%, and shareholders had been happy with bottom-line steering of $0.95 to $1.15 per share on an adjusted foundation.
Picture supply: Getty Photos.
Feeling chippy
Tech trade followers took the report as an indication not simply of Micron’s capability to outlive the COVID-19 pandemic but additionally of more healthy cyclical traits in your entire chip sector. The shift towards distant work has led to a giant acceleration within the tempo of digital transformation, together with an increase in gross sales of key tech merchandise like knowledge facilities. Making parts for these merchandise is profitable for chipmakers, and whilst companies attempt to get better, they’re nonetheless planning to cope with a probably prolonged time period throughout which they’re going to face the potential of having to assist unconventional work preparations.
Micron’s section numbers confirmed encouragingly broad-based success. Costs improved for reminiscence chips, and gross sales of cloud solid-state drives doubled sequentially from three months in the past. Income from cell merchandise was additionally greater, with corporations getting ready for the approaching 5G improve cycle.
The information despatched shares upward throughout the trade, with Xilinx (NASDAQ:XLNX) main the best way with a 7% rise. Superior Micro Gadgets (NASDAQ:AMD) and Western Digital (NASDAQ:WDC) had been up 5%, whereas NVIDIA (NASDAQ:NVDA) and Intel (NASDAQ:INTC) settled for 3% beneficial properties.
There’s nonetheless loads of possibilities for the restoration within the second quarter to face a setback, and the stock market is not out of the woods but. However traders in semiconductor stocks have excessive hopes that they’ve seen the worst of this explicit enterprise cycle, they usually’re assured that Micron and its friends can enhance from right here.
