The Roundhill Memory ETF (DRAM) has come under intense selling pressure recently as concerns about the memory and technology sectors escalated. It dropped to $50 on Friday, down over 33% from its year-high. This article looks at some of the top DRAM ETF stocks to watch this week, including Western Digital (WDC), SanDisk (SNDK), and Micron (MU).
SanDisk stock in focus ahead of earnings
SanDisk is a minor holding in the DRAM ETF, accounting for 3.76% of the fund. After soaring to a record high this year, the stock has dived by nearly 50%, mirroring the performance of other companies in the memory industry.
Therefore, SanDisk stock will be in the spotlight this week as the company publishes its financial results on Wednesday. These numbers will provide more color about its business, including its long-term contracts.
SanDisk has hinted that its growth continued in the last quarter. As a result, analysts expect the upcoming results to show that its revenue jumped by 341% in the quarter to $8.4 billion. Its guidance for the current quarter is expected to be $10.62 billion, a 360% annual increase.
The same growth is expected in its profitability because of rising memory prices. For example, the earnings-per-share (EPS) is expected to move to $34.5 from last year’s 29 cents.
Therefore, a strong revenue and earnings growth figures will likely provide it with the catalyst it needs to bounce back.
Western Digital Corporation
Western Digital Corporation is another DRAM ETF stock to watch this week. The company, which was the parent company of SanDisk before last year’s spin-off, will also release its numbers on Wednesday. These results come as the stock has dropped by over 30% from its peak this year.
Like SanDisk, Western Digital’s business is thriving because of the rising memory demand. Yahoo Finance data shows that analysts predict the earnings report will show that its revenue jumped by 41% in the quarter to $3.7 billion.
The company’s earnings-per-share is also expected to nearly double, moving from last year’s $1.66 to $3.3.
As such, a strong earnings report and forward guidance will be bullish for the company as it will show that there is still demand for its products. Analysts have a bullish outlook for the company, with the average target being $655, much higher than the current $544. Just recently, Citi analysts boosted the target from $685 to $800.
Micron Technology
Micron Technology, the second-biggest company in the DRAM ETF, will be in the spotlight this week after its recent sell-off. Its stock has dropped by 35% from its year-to-date high.
The stock has dropped despite the fact that its business is firing on all cylinders. Its recent earnings report showed that its revenue jumped to $41 billion in its third quarter from $9.3 billion in the same period last year.
Analysts expect that this growth will continue, with the fourth quarter figure expected to grow by 350% to $50.4 billion. If this is correct, its annual revenue will have grown by 247% to $129 billion.
Micron will not publish its earnings this week. Still, traders will focus on its stock for cues on the memory sector. It will also react to the upcoming AMD earnings, which are important because it is one of the biggest clients.
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