Semis Rage Higher After Micron Shatters Estimates

Needham raised their pt on MU to $76, clearly not impressed by the stocks 70% return, year to date. They’re looking for MOAR.

Following a solid quarter and guide, it is increasing tgt to $76 — representing a 10x P/E on just-raised non-GAAP FY18 EPS of $7.60. Firm believes this multiple is reasonable as it is simply applying a median historical multiple on a discounted earnings run-rate of $2.16 EPS /q (Nov. guidance). Currently, the stock is trading at a trough multiple on the perception of a “peak earnings cycle”. Needham asserts it should be trading at a market multiple on ongoing earnings growth. Firm does not believe it is at the peak of the cycle as end markets for DRAM are significantly more diverse than in years past; stabilizing the volatility of the pricing and perhaps lengthening the contracts.

After a few days of apprehension, bulls are jauntily trotting down Wall Street today — led higher, mostly, by tech stocks and banks. Within tech, the semis are at the vanguard of the rise.

There are large cocked gains in MU, IOTS, AMBA, MKSI, AMAT, LRCX, UCTT, MX, AXTI, DIOD, and so many more. It truly is an orgy of heightened risk out there — men and women cavorting, nakedly, without clothes — unafraid of a change in the season.

I’ve learned to be somewhat patient over the years. Seeing these rallies always makes me feel at home, yet a distant stranger because of the simplicity of it all. Life isn’t supposed to be this easy. Half brain damaged advisors aren’t supposed to thrive for extended periods of time — for a reckoning is supposed to come and wipe them the fuck out.

But here we are, in the stupidest shit ever — with nearly everyone with a brokerage account enjoying double digits returns over the past year.

Say what you want about it, profits have been increasing and business has been good, if not great. Unemployment is low, real estate prices high — America’s dominance has never been stronger.