Micron has nearly 30% upside as Daiwa sees memory market close to bottoming
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Micron Technology (NASDAQ:MU) may stand to benefit as investment firm Daiwa said the memory market, which has been hit by a deep downturn, is close to bottoming.
Analyst SK Kim, who has a buy rating and a $65 price target on Micron (MU), implying nearly 30% upside from current levels, said the memory market is likely to see losses expand in the first-half of this year as price declines continue and inventories rise further. However, that downturn is expected to improve in the latter part of the year, thanks to new CPU launches, a recovery in China and new applications, including mixed reality headsets.
All of that bodes well for an even stronger recovery in 2024 than some of Wall Street are estimating, Kim added.
"While we look for an improving memory cycle in 2023 and rise in DRAM prices in [second-half of 2023], investor sentiment will likely remain conservative in early [first-quarter] amid sizeable losses for memory suppliers," Kim wrote in a note to clients. 
"After likely further production/capex cuts, we look for share prices to start rebounding from [the end of the first-quarter]," Kim added.
In addition, Kim noted that dynamic random access memory, or DRAM, prices are likely to rebound starting in the third-quarter, while the NAND market turns "tight" starting in the fourth-quarter.
Kim has a positive view on the sector and has buy ratings on the other memory chip makers Samsung Electronics (OTCPK:SSNLF), SK Hynix and Nanya Technology (OTCPK:NNYAF).
Micron (MU) shares rose nearly 4% to $52.30 in premarket trading on Wednesday.
Last month, Argus Research downgraded Micron (MU) due to the potential for "deep operating losses" in its future.