1) Micron Technology, Inc. (NASDAQ:MU)
Average Upside Potential: 77.27%
Micron Technology, Inc. (NASDAQ:MU) is engaged in manufacturing and marketing dynamic random access memory chips (DRAMs), static random access memory chips (SRAMs), flash memory, and memory modules. The company’s product portfolio of memory and storage technologies helps in creating “smarter” loT devices for different industries. It provides the right memory and storage technologies for industrial loT solutions. Therefore, industrial automation technologies use connected, smart machines so that operational efficiency is improved. Industrial PCs and embedded loT infrastructure solutions use Micron Technology, Inc. (NASDAQ:MU)’s products and internet of things platform level support in order to accelerate time to market.
Since Micron Technology, Inc. (NASDAQ:MU) is a cyclical business, healthy growth prospects of AI systems, rebound in smartphone sales, and demand for computer-packed vehicles should act as tailwinds for the company. Not only these areas, data storage capacities continue to remain elevated mainly because of cloud computing and 5G wireless technologies.
In its fiscal 3Q 2024 results, the company saw 17% sequential revenue growth, outpacing its guidance range. This growth stemmed from strong AI demand and healthy execution. Micron Technology, Inc. (NASDAQ:MU) continues to gain market share in high-margin products such as High Bandwidth Memory (HBM). Its data center SSD revenue touched a record high, reflecting the strength of its AI product portfolio. The strong demand for HBM is expected to strongly contribute to the company’s revenue.
Micron Technology, Inc. (NASDAQ:MU) has several AI-related catalysts beyond HBM, which should help it deliver stronger growth in the current quarter. For example, AI-powered smartphones and PCs might result in higher demand for memory sales. This is because these categories have higher memory content.
Analysts at Robert W. Baird upped their price target on the company’s shares from $150.00 to $172.00. They gave an “Outperform” rating on 24th June. According to Insider Monkey’s 1Q 2024 data, 115 hedge funds were long Micron Technology, Inc. (NASDAQ:MU).
ClearBridge Investments, an investment management company, released its 2Q 2024 investor letter. Here is what the fund said about Micron Technology, Inc. (NASDAQ:MU):
“Stock selection in the IT sector proved to be the largest contributor to performance, particularly driven by the strong performance of Micron Technology, Inc. (NASDAQ:MU) The company, which designs, develops, manufactures and sells memory and storage products, continued its strong performance alongside other AI beneficiaries as the anticipated demand for new and additional storage essential for housing and training large language AI models continues to grow.”
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 an AI stock that is more promising than MU but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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