1. Micron Technology, Inc. (NASDAQ:MU)
Forward P/E Ratio: 10.97
Earnings Growth This Year: 586.63%
Number of Hedge Fund Holders: 107
Micron Technology, Inc. (NASDAQ:MU) specializes in storage solutions for various technology applications and has a robust portfolio of Dynamic Random-Access Memory (DRAM), NAND Flash Memory, and NOR Flash Memory, . It is one of the best affordable stocks to buy right now.
Despite a huge market capitalization of $111.23 billion, it might not be the biggest player in the storage solution industry, however the company exercises its competitive edge by manufacturing chips that are denser than its competitors. Considering the high demand for its products within the AI and Data Center industry, management has shifted its focus on enhancing its product portfolio. For instance, on November 12, Micron Technology, Inc. (NASDAQ:MU) released one of its fastest and most efficient 60TB SSDs. The drive is designed to endure heavy workloads, making it compatible with Data Center and AI applications.
The most recent quarter, Q4 of fiscal 2024, was driven by a robust demand for its DRAM in the AI market. The company generated $7.75 billion in revenue, up 93% year-over-year. Moving forward, management anticipates continued demand from data centers and the artificial intelligence industry.
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 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 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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