10 Most Promising Low-Cost Stocks According to Hedge Funds

1. Micron Technology, Inc. (NASDAQ:MU)

Number of Hedge Fund Holders: 120

Forward P/E Ratio as of October 13, 2024: 11.97

Micron Technology, Inc. (NASDAQ:MU) ranks first on our list of the most promising low-cost stocks according to hedge funds. The semiconductor company is home to intelligent infrastructure enabling the development of artificial intelligence and generative AI applications. Its primary offerings include memory and storage products.

In the fiscal year 2024, Micron Technology, Inc. (NASDAQ:MU) grew its revenue by 62% and gross margins by more than 30 percentage points. The company reported record revenue growth in its data center and automotive segments. During the year, the company invested $8.1 billion in capital expenditures. The company expects capex to be considerably higher in 2025.

For the fiscal first quarter of 2025, Micron Technology, Inc. (NASDAQ:MU) expects revenue to reach $8.7 billion and gross margin at 39.5%. The company is also a market leader in its DRAM and NAND technologies, accounting for 69% and 31% of its revenue respectively.

The company is shifting its entire focus to meeting the demands for artificial intelligence and data center customers, two of the fastest-growing industries. The company’s leadership in process technologies promises strong growth and higher returns.

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.”

Overall, MU ranks first among the 10 most promising low-cost stocks according to hedge funds. While we acknowledge the potential of semiconductor companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. 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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