(San Francisco)

Morgan Stanley has just made two interesting picks in the tech world. While these are not specifically tech companies, these chipmakers are so closely related that it is fair to lump them in. In particular, Morgan Stanley is bullish on rising memory demand in chips and therefore likes two names to do well. The first is Micron (ticker: MU), and the second is Western Digital (WDC), both of which specialize in DRAM and NAND. The former is used in mobile phones and servers, while the latter is used in smartphones and solid state hard drives. According to Morgan Stanley, “channel checks make it clearer that customers are building real conviction that memory will tighten [more demand versus supply] over the course of 2020, which is leading them to put more inventory into place”.

FINSUM: This matches exactly what we see on the consumer demand front, so we do not have any argument with these picks.