12 Most Promising AI Stocks According to Wall Street Analysts

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

Average Upside Potential: ~32.5%

Number of Hedge Fund Holders: 107

Micron Technology, Inc. (NASDAQ:MU) plays a key role in enabling the broader AI industry. Its products are critical to the infrastructure needed to power AI technologies. In the recent past, the company’s shares were under pressure after it provided a downbeat forecast due to weak demand for PCs and smartphones. That being said, memory’s importance in developing AI and in the growth of data centers places Micron Technology, Inc. (NASDAQ:MU) for long-term revenue growth and margin expansion.

Citi analyst Christopher Danely reiterated a “Buy” rating on the company’s shares, setting a price objective of $150.00. Even though the PC and cell phone DRAM markets remain weak, they account for only 25% of the company’s revenue and can recover by Q2 2025, says Danely. The analyst went on to add that the data center segment, a strong part of Micron Technology, Inc. (NASDAQ:MU)’s DRAM business, represents half of its revenue and is on an upward trend each quarter, courtesy of the increasing demand for AI applications.

Furthermore, the HBM segment is expected to post high gross margins, which can help contribute to overall margin growth. Hence, Danely’s rating stems from an expected market recovery and opportunities in critical business segments. Notably, the demand for HBM is mainly aided by rapid expansion of AI applications and data center growth. Delaware Funds by Macquarie, an investment management company, released its Q3 2024 investor letter. Here is what the fund said:

“Micron Technology, Inc. (NASDAQ:MU) – Fundamentals here also appear solid though concern about global demand for handsets and PCs drove the shares down during the quarter. We expect Micron to be a significant beneficiary of growth in AI demand as investment in new data centers is extremely memory (semiconductor) intensive.”