Is the Metaverse inseparable from DRAM? Micron's stock price soared to the highest level since July

US investment bank Evercore ISI recently included Micron in its top picks list, and pointed out that Nvidia and AMD's stock prices have risen recently due to the concept of the Metaverse, but investors have overlooked that high-performance computing cannot be separated from DRAM. As a result, Micron's stock price soared to its highest point since July last Friday.

According to Barron's and MarketWatch, the Philadelphia Semiconductor Index has risen 22.8% since the beginning of June, while Micron's stock price has fallen 1.3% during the same period. However, Evercore ISI analyst CJ Muse pointed out that the trend is changing. "Expectations may bottom out in the first quarter of 2022, PC restrictions elsewhere are easing, and large-scale capital expenditures may improve before the end of the year."

Since the beginning of August, Wall Street has cut its earnings expectations for the February and May quarters of 2019 by 33% and 31%, respectively. Muse believes that although there may be further declines, the weakness has been priced in. Micron's net income may bottom out in the February or May quarter, depending on the impact of supply shortages.

Muse further noted that Nvidia and AMD’s stock prices have recently risen due to Facebook’s name change to Meta and its plans to invest in building the Metaverse, a virtual world where people can connect to each other. We would like to point out that HPC cannot do without DRAM, which is another important benefit that we think investors are overlooking.”

Muse also believes that Lam Research will be well-positioned next year as a semiconductor equipment company that is "more dependent on memory." In his view, Lam Research could benefit from increased NAND capital expenditures, improved gross margins, and reduced supply chain pressure.