• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Technology

Cramer: Supply Is Begetting Demand for Micron Shares

And the demand is lifting all related boats.
By JIM CRAMER
Oct 12, 2017 | 12:47 PM EDT
Stocks quotes in this article: MU, AMAT, LRCX

Is supply begetting demand? That's sure what it feels like with this Micron Technology (MU) situation. They want to sell $1 billion of stock -- and it looks like they will get $40.

Then next thing you know, they are selling $1.2 billion and they are pricing it at $41 and the darned thing hangs up there.

This is a sure sign that institutions are thrilled that they can buy this company -- one that not one wanted at $28 -- and not roil the stock. There's enough around to get a full position on knowing that they are using a big part of the proceeds -- $476 million -- to pay down debt and the rest to buy more machines that make semiconductor machines.

This is a please-all situation, as Micron's balance sheet is no beauty, and if you own machine makers Lam Research Corp (LRCX) and Applied Materials (AMAT) , you are grateful for the orders.

So every stock spikes.

There was a view not that long ago that there would be a dramatic decline in chip pricing, but that's no longer the case: witness the price tag boost from $40 to $60 by Barclays this morning.

Micron had been the cheapest stock on forward earnings in the S&P 500, at least now that the auto companies' stocks have moved, selling at only 5x next year's earnings. That's because of the general belief that pricing has never stayed this strong for this long.

Now it looks like the data center strength for flash and the telco demand for memory could elongate the cycle -- making this cheap stock too cheap, as that will keep pricing stable to tighter.

Normally it would be a bad sign that Micron's issuing the stock -- kind of like a bad IPO, knowing that this is the last bad quarter. Instead, though, it is being viewed as a chance for Micron to be prudent and for it also to add a decent amount of capacity to keep earnings growing while not creating excess flash or DRAM supply.

Put it all together and you have a virtuous cycle that never used to exist in tech, but does now because of e-commerce, machine learning and the expansion of the cellphone's ability to do just about everything.

Join Jim Cramer, CNBC's Jon Najarian and Other Experts Oct. 28 in New York

Jim Cramer will host CNBC's Jon Najarian, TD Ameritrade's JJ Kinahan, famed analytics expert Marc Chaikin and other market mavens on Oct. 28 in New York City to share successful strategies for active investors.

You can join them as they discuss how smart investors can make the most of options trading, futures contracts, fundamental and quantitative analysis and great ETFs to buy right now. Participants will also get a chance to meet Jim and other panelists and take photos.

When: Saturday, Oct. 28, 8 a.m.-3 p.m. ET

Where: The Harvard Club of New York, 35 West 44th St., New York, N.Y.

Cost: Special sale price: $150 per person. (Normal price: $250)

Click here for the full conference agenda or to reserve your seat now.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Action Alerts PLUS, which Cramer co-manages as a charitable trust, has no positions in the stocks mentioned.

TAGS: Investing | U.S. Equity | Industrials | Technology | Markets | Stocks

More from Technology

Facebook Investors Shouldn't Panic Over Reports the FTC Wants an Injunction

Eric Jhonsa
Dec 13, 2019 2:44 PM EST

Recent reports have heightened fears that the FTC will push for Facebook to be broken up. But any such effort is by no means guaranteed to succeed...and might not be a disaster for shareholders even if it did.

My Trade Idea for Oracle

Stephen Guilfoyle
Dec 13, 2019 12:30 PM EST

ORCL is competing for the business to business cloud, obviously a tough space.

Broadcom's Guidance Is Stronger in Some Spots Than Others

Eric Jhonsa
Dec 12, 2019 9:04 PM EST

Broadcom expects fiscal 2020 to be a good year for networking and RF chip sales. But it forecasts a major drop in its "mixed-signal custom" wireless chip sales to Apple.

Trade Deal Apparently Arrives -- Now What?

James "Rev Shark" DePorre
Dec 12, 2019 4:41 PM EST

Market players are relieved to finally have this uncertainty at least partially resolved, but will it bring new highs or trigger profit-taking by traders who have been anticipating the news.

Nvidia Talks Shop at Investment Conferences: 5 Important Takeaways

Eric Jhonsa
Dec 12, 2019 4:29 PM EST

The GPU giant remains upbeat about cloud demand, and downplays the impact of Intel CPU shortages on its gaming GPU sales.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 10:10 AM EST BOB LANG

    Banking a Big Winner in SRPT, Rolling Up

    Nov. 20 here on the CC, I mentioned buying some Ma...
  • 10:36 AM EST GARY BERMAN

    Fibocall: How High Can Crude Go?

    On crude: I am looking for higher, but please b...
  • 08:20 AM EST BOB LANG

    Webinar Time - Talkin' Calendars, Butterflys

    join me later today after the market close as we t...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2019 TheStreet, Inc., 14 Wall Street, 15th Fl, NY, NY 10005

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login