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Micron's surprise quarter means a windfall could be in store for AMD and Nvidia, Jim Cramer says

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CNBC’s Jim Cramer on Thursday said details of Micron’s quarterly performance indicate a windfall is in store for some of its industry peers.

The semiconductor manufacturer, after Wednesday’s close, reported a beat on the top and bottom lines for the February quarter. Micron CEO Sanjay Mehrotra revealed that soft consumer demand was offset by demand for gaming and remote work uses.

“When Sanjay says the data center’s on fire because everyone’s going online to cope during the coronavirus lockdown … that means great things for Nvidia and AMD,” Cramer said on “Mad Money.”

Shares of Micron popped 5.39% to $44.79 Thursday, just short of the 5.60% lift in the Nasdaq Composite. Shares in Nvidia and AMD, both competitors, also rallied.

Nvidia produces computing and graphic chips, which are used for gaming. AMD, or Advanced Micro Devices, makes processors and chipsets for computers.

AMD is expected to report earnings in mid-April, while Nvidia is scheduled for May.

“And I still think even after the runs you can buy them, especially since they also make graphics chips used in gaming,” Cramer said.

Micron, which produces DRAM and flash memory chips, benefited from the work-from-home transition as governments and communities around the globe try to get a grip on the coronavirus outbreak. With office and school buildings closed for the near future, workplaces and students are relying even more on laptops and data services to operate them.

Micron reported earnings of 45 cents per share, minus some items, and revenue of $4.80 billion for the fiscal 2020 second quarter, versus Factset estimates of 37 cents and $4.69 billion, respectively. With stay-at-home orders in place and commerce at a near halt, Cramer said he was among many who did not expect a strong showing from Micron.

The results triggered a double upgrade — “underperform” to “buy” — from Bank of America, citing growth opportunities after the pandemic is resolved. Piper Sandler, which has a “neutral” rating on the stock, reduced its price target to $48 from $56.

“The most bullish story today had nothing to do with the stimulus package and everything to do with the cloud,” Cramer said, highlighting that the stay-at-home economy would affect other tech segments including online shopping, cloud services, 5G and cybersecurity.

Disclaimer: Cramer’s charitable trust owns shares of Nvidia.

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