Western Digital stock soars on analyst ratings
The April 16 trading session started with memory chip stocks among the top gainers of the S&P 500 Index (SPY). At the start of the trading session, NAND chipmaker Western Digital’s (WDC) stock soared 5% above $54, its highest level in 2019, after two analysts upgraded the stock to “buy” ahead of WDC’s fiscal 2019 third-quarter earnings release on April 29.
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Deutsche Bank upgraded the stock to “buy” from “hold,” and Longbow Research upgraded the stock to “buy” from “neutral” as they expect NAND fundamentals to bottom in the second quarter of calendar 2019 and NAND and HDD growth to pick up in the second half of calendar 2019.
Other memory stocks soar
Memory is an oligopoly market with few players. So optimism around one supplier spreads to other suppliers. WDC’s HDD rival Seagate Technology’s (STX) stock rose 2.2%, and its NAND rival Micron Technology’s (MU) stock rose 1.9%.
As the memory market is capital-intensive, memory stock prices influence stocks of semiconductor manufacturing equipment suppliers. Applied Materials’ (AMAT) stock rose 3.1%, ASML Holdings’ (ASML) stock rose 1.6%, and Lam Research’s (LRCX) stock rose 2.0%.
WDC’s stock price movement
The last time Western Digital reported its fiscal 2019 second-quarter earnings on January 24, its stock rose 12% the next day, and the stock’s traded volume was 37 million—six times its average daily volume of around 6 million. We expect more double-digit growth in Western Digital’s stock when it releases its next earnings at the end of the month.
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