1. Micron Technology, Inc. (NASDAQ:MU)
Forward P/E Ratio: 11.4
Earnings Growth This Year: 586.63%
Number of Hedge Fund Holders: 107
Micron Technology, Inc. (NASDAQ:MU) is the best affordable tech stock to invest in now. The company specializes in memory and storage solutions for various technology applications. Its product portfolio includes Dynamic Random-Access Memory (DRAM), NAND Flash Memory, and NOR Flash Memory.
While Micron Technology, Inc. (NASDAQ:MU) may not be the biggest player in the storage drive markets, however, its chips are recognized to be denser than most of its competitors thereby giving it a competitive edge. For instance, its Higher-density DRAM chips allow data centers to store more short-term data, whereas NAND chips are used to store long-term data in solid-state drives.
The company has shifted its focus to meeting the demand for AI and data centers. To cater to this it released its fastest and most efficient 60TB SSD on November 12. The SSD is designed specifically to cater to workloads such as networked AI data lakes, ingest, data preparation, and checkpointing.
During the fiscal fourth quarter of 2024, the company generated $7.75 billion in revenue, indicating 93% year-over-year growth. The quarter was fueled by robust AI demand for its DRAM and other memory products. Management expects strong demand in the data center.
Alger Mid Cap Focus Fund stated the following regarding Micron Technology, Inc. (NASDAQ:MU) in its Q3 2024 investor letter:
“Micron Technology, Inc. (NASDAQ:MU) is a leading provider of innovative memory and storage solutions supporting key trends like AI, 5G, machine learning, and autonomous vehicles. Micron’s portfolio includes high-bandwidth memory (HBM), which is critical for efficient AI workloads, along with storage solutions like DRAM, NAND, and NOR. These are sold in various forms such as wafers, components, modules, SSDs (solid-state drives), and MCPs (multi-chip packages). We believe the company is well-positioned to potentially benefit from secular trends in AI, data centers, cloud computing, and 5G markets. In July, shares detracted from performance after management lowered expectations due to the slower-than-expected pace of clearing excess inventory. Weak demand in markets like PCs and smartphones led to lower shipment forecasts for the next fiscal quarter. However, towards the end of the quarter, Micron reported better-than-expected fiscal fourth-quarter results, driven by strong data center demand and continued growth in AI-leveraged HBM sales. Although the share price rose after the announcement, shares were still down overall for the quarter.”
While we acknowledge the potential of Micron Technology, Inc. (NASDAQ:MU) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for a promising AI stock that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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