Micron and SK Hynix seen undervalued amid memory shortage
Despite fears of an oversupply cycle, analysts argue that current memory scarcity will persist longer than expected. This prolonged shortage makes Micron and SK Hynix attractive investments at current valuations.
Micron's stock fell approximately 20% in the last month due to fears of a memory chip oversupply cycle. However, Jan Beckers argues the current shortage will last significantly longer than the market expects. Current memory scarcity is already reducing the sales of computers and Apple iPhones, meaning demand is being suppressed and will return later as additional demand. Beckers believes Micron and SK Hynix are trading at very cheap valuations for companies that are likely sold out for more than three or four years. He asserts that the probability of these companies generating profits exceeding their current market capitalization before any potential oversupply occurs is high, making the memory segment an attractive investment area despite the fear of a 'hog cycle'.