Samsung Stock Fell Despite a 19x Profit Jump. Here's What That Means for Micron Investors
The market is expecting bigger earnings beats from memory manufacturers, but it isn't rewarding them with a justified valuation representing their exponential growth.
Overview
Samsung is one of the most important memory manufacturers in the world, as evidenced by its market share in the dynamic random-access memory (DRAM) and NAND flash storage markets.
Counterpoint Research notes that Samsung dominates both these memory niches. It is the top vendor of NAND flash memory, with a market share of 29%, and enjoys a similar position in the global DRAM market, with a 38% share. This massive dominance translated into a phenomenal 19x year-over-year increase in Samsung's second-quarter operating profit when it released its preliminary report last week.
Details
However, Samsung stock has dropped 20% since releasing its preliminary report on July 7. What's more, Samsung's pullback has also created concerns about the prospects of high-flying chipmaker Micron Technology (NASDAQ: MU). Let's see why that has been the case.
Source
Originally published at www.fool.com.