1. Micron Technology Inc. (NASDAQ:MU)
Number of Hedge Fund Holders: 107
Micron Technology Inc. (NASDAQ:MU) is a global leader in the design and manufacture of memory and storage solutions. It offers a portfolio of products, including DRAM, NAND flash, and other memory and storage technologies, and serves a broad range of markets including data centers, mobile, automotive, and industrial.
It maintains a competitive edge in the storage solutions market through the development of high-density memory chips, utilizing this advantage to cater to the expanding needs of the AI and Data Center sectors. The company recently unveiled a groundbreaking 60TB SSD. This high-performance drive is designed to withstand the demanding workloads of Data Centers and AI applications.
In FQ4 2024, Micron Technology Inc. (NASDAQ:MU) generated $7.75 billion in revenue, a 93% year-over-year increase, primarily driven by demand for its DRAM chips in the AI market. The company now anticipates sustained growth driven by the continued expansion of data centers and the increasing adoption of AI.
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 growth potential of Micron Technology Inc. (NASDAQ:MU), our conviction lies in the belief that AI stocks hold great promise for delivering high 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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