UPDATE: Micron outlook, capex hike spark rally in memory chip makers
By Wallace Witkowski, MarketWatch
Micron shares up 69% for the year, close at 15-year high
Micron Technology Inc. shares soared to a more than 15-year high Wednesday, leading S&P 500 index gainers, after the memory chip maker boosted its outlook following an earnings beat and raised its forecast capital spending, prompting analysts to hike their price targets on the stock.
Micron (MU) shares closed up 8.5% at $37.09 on heavy volume Wednesday, the stock's highest close since March 2002, according to FactSet data. Shares are up 69% for the year.
By the close, more than 83 million shares changed hands, compared with a 52-week average daily trading volume of 27.3 million shares. In comparison, the S&P 500 closed up 0.4% for the session and is up 12% for the year.
Read:Micron reassures investors that memory-chip demand remains very high (http://www.marketwatch.com/story/micron-reassures-investors-that-memory-chip-demand-remains-very-high-2017-09-26)
With memory prices having surged over the past year and Micron topping Wall Street estimates for the quarter late Tuesday (http://www.marketwatch.com/story/micron-tech-shares-rise-after-earnings-beat-2017-09-26), the Boise, Idaho-based company forecast fiscal first-quarter earnings per share of $2.09 to $2.23 on revenue of $6.1 billion to $6.5 billion. Before the outlook, analysts surveyed by FactSet had forecast earnings of $1.82 a share on revenue of $6 billion. After Micron's outlook, the Wall Street consensus rose to $2.11 a share on revenue of $6.28 billion.
Micron also hiked its expected capital spending to $7.5 billion in 2018, compared with $6 billion in 2017, and that had a ripple effect through the sector, sending chip-focused shares higher.