Shares in Micron Technology Inc. jumped for the week ended Jan. 10 after a Wall Street analyst took a bullish stance on one of the memory-chip manufacturer's key segments. AMC Entertainment Holdings Inc., meanwhile, slumped after a top exec at the company warned of a bleak year ahead.
Cowen analyst Karl Ackerman this week upped his rating on Micron shares to "outperform" from "market perform" and raised his price target to $70 from $50, saying the company's DRAM business shows particular promise. DRAM refers to a type of memory in which data is erased once a computer is turned off.
The analyst said Micron's DRAM unit also stands to benefit from the rollout of 5G, which will necessitate advanced memory chips capable of processing data at peak speeds. 5G is set to offer download speeds many times faster than the current 4G LTE wireless networks.
"We think DRAM fundamentals improve sooner than investor expectations of a second-half recovery on a modest server upgrade cycle ... and 5G smartphone adoption that is driving upwards of 50% content increases in premium tier handsets," Ackerman wrote in a research note.
As of midday Jan. 10, Micron stock was trading at $56.78 apiece, up 4.13% from its Jan. 3 close.
Meanwhile, AMC Entertainment shares cratered after CFO Craig Ramsey prepared investors for what could be a rocky year for the U.S. movie theater owner.
Speaking at a Jan. 7 investor conference, Ramsey said a relatively weak film slate for 2020 and the booming streaming industry pose significant challenges for AMC.
Ramsey predicts more people "will stay at home and watch content through a streaming platform," leading to a decline in theater attendance.
Several industry giants have entered the streaming market recently, such as The Walt Disney Co. and Apple Inc. Disney launched its Disney+ streaming service in November 2019 for $6.99 per month, while Apple launched Apple TV+ the same month for $4.99 a month.
"It's had a negative overhang on our equity trading in conjunction with our leverage profile. It's had an impact ... not being a particularly good year for our shareholders," Ramsey said.
AMC Entertainment shares were trading down 11.34% for the week around midday Jan. 10, at $6.49 apiece.
Apple shares, however, surged after a report outlined strong demand for its flagship iPhone in China during December 2019.
According to data released Jan. 9 by the China Academy of Information and Communication Technology, a government research organization, iPhone sales in China grew 18% year over year during December 2019. Additionally, Apple shipped about 3.2 million smartphones during that month, versus 2.7 million in December 2018, the report said.
Wedbush Securities analyst Daniel Ives praised the results, saying Apple's iPhone growth in the China region is roughly 200 basis points above his expectations.
"China remains the key region going forward in the bull/bear debate," Ives wrote in a Jan. 9 research note.
Around 12:30 p.m. ET Jan. 10, Apple shares were trading at $311.20, up 4.63% for the week.