Micron, Western Digital, Seagate rise as Mizuho upgrades, citing 'improving' trends
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Micron Technologies (NASDAQ:MU), Western Digital (NASDAQ:WDC) and Seagate Techologies (NASDAQ:STX) rose around 1% each in premarket trading on Friday as investment firm Mizuho Securities upgraded the trio, citing "improving structural trends" in the memory market.
Analyst Vijay Rakesh raised his rating on Micron Technologies (MU), Western Digital (WDC) and Seagate Technologies (STX) to buy from neutral, noting that there is now an "accelerated" path towards supply and demand balance for memory, with the belief that the first-quarter will be the peak in inventories and trough in revenue. 
"Near-term headwinds remain" due to high inventories, the continued decline of PCs, smartphones and servers and weak memory pricing, which is down 10% year-to-date. "However, we are close to a cyclical bottom," Rakesh wrote.
In addition to the upgrades, Rakesh also raised his estimates on the trio.
The analyst also noted semiconductor equipment company Applied Materials (AMAT) is expected to benefit from a rebound in memory.
Rakesh added he expects there to be better second-half demand and when combined with low supply and capital spending cuts, it positions Micron (MU), Western Digital (WDC) and Seagate (STX) for upside, as their shares are between 40% and 50% below their peaks.
With bit supply and capital spending for memory suppliers expected to be at the lowest levels in 10 years, it's likely that the second-half of the year will be much better for the industry. Additionally, the exit of Yangtze Memory Technologies from the NAND market is also helping the memory market, as more supply comes off the table. 
There is also the belief that PC demand starts to benefit from better enterprise demand and China's reopening, while the smartphone industry rebounds in the second-half of the year, led by the iPhone 15 launch.
Lastly, there should be continued growth in the data center and cloud markets, with Oracle (ORCL), Google (GOOG) (GOOGL) and Amazon (AMZN) increasing spending, aided in part from new products from AMD (AMD), Nvidia (NVDA) and Intel (INTC), respectively.
On Thursday, Micron (MU) disclosed it is cutting base salaries for top leaders and suspending some bonuses for fiscal 2023.
Analysts are largely cautious on Micron (MU). It has a HOLD rating from Seeking Alpha authors, while Wall Street analysts rate it a BUY. Conversely, Seeking Alpha's quant system, which consistently beats the market, rates MU a HOLD.