1. Micron Technology, Inc. (NASDAQ:MU)
Forward Price to Earnings Ratio: 12.57
Earnings Growth: 584.60%
Number of Hedge Fund Holders: 120
Micron Technology, Inc. (NASDAQ:MU) is a leading producer of memory and data storage devices. It is one of the largest producers of DRAM, which is used in computers and servers for quick data access, and NAND flash memory, which is commonly found in smartphones and SSDs (Solid State Drives) for storing data.
The company finds itself at the center of the data centers and AI revolution due to the indispensable use of its storage devices. Keeping up with the demand Micron Technology, Inc. (NASDAQ:MU) is upgrading its product portfolio. For instance, on October 15, the company launched a new line of DDR5 memory modules designed specifically for AI-powered PCs. The new memory modules, called CUDIMM and CSODIMM can operate at speeds up to 6,400 MT/s (mega transfers per second). This speed is more than twice as fast as the previous DDR4 memory and about 15% faster than traditional DDR5 memory without clock drivers.
Following the high demand for its products the company is experiencing record revenue growth. During its fiscal fourth quarter results for 2024, the company reported year-over-year revenue growth of 93% to reach $7.75 billion. The growth was driven by robust demand for AI and data center DRAM products.
CEO, Sanjay Mehrotra mentioned that their NAND revenue was led by record data center SSD sales and exceeded $1 billion in quarterly revenue for the first time. He believes that the company is entering fiscal 2025 with the best competitive position and forecasts record revenues for Q1 of fiscal 2025.
Micron Technology, Inc. (NASDAQ:MU) is the cheapest NASDAQ stock to invest in now. It is trading at only 13 times its forward earnings. Analysts are expecting a staggering 585% earnings growth this year.
Baird Chautauqua International and Global Growth Fund stated the following regarding Micron Technology, Inc. (NASDAQ:MU) in its Q3 2024 investor letter:
“After Micron Technology, Inc.’s (NASDAQ:MU) price appreciated 54% in 1H24, investors became anxious about potential memory weakness, less clear cyclical recovery pace, and whether competitor Samsung will act rationally with capacity expansion. We maintain our long-term positive view on the industry’s demand/supply situation. We believe Micron is well positioned in technology capability, and that its margins will continue to improve.”
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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