1. Micron Technology Inc (NASDAQ:MU)
Number of Hedge Fund Investors: 115
Jim Cramer in a latest program said Micron is a “quiet bellwether” of “non-AI” and “some AI” semiconductor plays because the company’s “strength” is high-bandwidth memory which is used all across the “semiconductor food chain.” Cramer said even though Micron had doubled since October, “I bet it’s not done going up.”
Wall Street is taking notice of Micron Technology Inc’s (NASDAQ:MU) ascendance in the AI industry dominance hierarchy. BofA thinks Micron Technology Inc (NASDAQ:MU) is one of the Big 10 AI stocks in 2024, having gained about a massive 62% so far this year.
UBS recently maintained a Buy rating on Micron Technology Inc (NASDA:MU) and increased its price target on the stock to $155 from $125, citing its industry checks pointing to higher prices in the DRAM and NAND memory industry. UBS said that Micron Technology Inc’s (NASDA:MU) valuation could become attractive once its gross margin peaks in the fourth quarter of 2025 . UBS expects Micron Technology Inc’s (NASDA:MU) EPS in 2025 to come in at around $17.50.
Sequoia Fund stated the following regarding Micron Technology, Inc. (NASDAQ:MU) in its fourth quarter 2023 investor letter:
“Exits last year included Netflix, Bank of America and Micron Technology, Inc. (NASDAQ:MU). As discussed in our Q2 shareholder letter, we exited Micron after the rationale for our investment was strained by rising geopolitical tensions, which have increased investment risks in the high-performance semiconductor industry. These risks are bearable, but we felt it prudent to reduce the portfolio’s exposure to them. We think both Bank of America and Micron were purchased at conservative prices given the facts at hand, but the facts changed and we moved on.”
While we acknowledge the potential of Micron Technology Inc (NASDAQ:MU), our conviction lies in the belief that under the radar 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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