Micron Know-how ‘s publicity to client markets reminiscent of smartphones and private computer systems might show problematic within the close to time period, in line with Piper Sandler. Analyst Harsh Kumar downgraded the semiconductor inventory to underweight from impartial, citing dangers from cyclical client merchandise markets and pricing headwinds inside the dynamic random-access reminiscence market. “Our downgrade is essentially because of the firm’s outsized publicity to cellular, PCs, and different client end-markets and the related developments within the macroeconomy,” Kumar wrote. “At the moment, the corporate has roughly 55% publicity to PCs, cellular, and different markets. As well as, the DRAM market, which represents over 70% of whole income, has already began to see worth declines for many configurations.” Many client merchandise sectors have come beneath strain in latest months as client spending relaxes on fears of an financial slowdown and rising inflation. On prime of that, the Federal Reserve has increase charges twice this 12 months in an effort to combat these inflationary pressures. In the intervening time, the Piper Sandler solely sees promise in Micron’s knowledge heart enterprise which makes up beneath 30% of whole income. “Within the present financial setting, our bias is to lean towards corporations which have differentiated fashions and have way more sustainable gross margins,” Kumar wrote. Together with the downgrade, Piper Sandler lower its worth goal on Micron to $70, representing a 7.1% draw back to shares within the close to time period. Micron’s inventory is down 19.1% on the 12 months. — CNBC’s Michael Bloom contributed reporting