15 Best Data Center Stocks To Buy According to Jefferies, Citi and Wall Street Analysts

4. Micron Technology Inc (NASDAQ:MU)

Average Analyst Share Price Target Upside: 77%

Average Analyst Share Price Target: $159.85

Number of Hedge Fund Investors  in Q1 2024: 115

Micron Technology Inc (NASDAQ:MU) is one of the biggest memory manufacturers in the world. This makes it a key player in the data center and AI markets, since advanced memory like HBM3 is indispensable for advanced AI GPU performance. Along with Korean memory manufacturers SK hynix and Samsung, Micron Technology Inc (NASDAQ:MU) is among the few pure play memory companies in the world, which provides it with key manufacturing advantages needed to operate in the high end of the industry. It is also the only pure play American memory manufacturer, which lends it a key advantage for US memory production particularly in the wake of the CHIPS and Science Act which has earmarked billions of dollars in subsidies for US chip makers. To wit, Micron Technology Inc (NASDAQ:MU) received a whopping $6.1 billion in funding from the Commerce Department in April 2024. However, as the firm depends solely on the memory market, its stock is vulnerable to downswings in the sector that are characteristic of the chip sector’s cyclicality. As an example, Micron Technology Inc (NASDAQ:MU) ‘s shares tumbled by 46% in 2022 when the semiconductor industry was struggling from the demand supply mismatch from the pandemic.

ClearBridge Investments mentioned Micron Technology Inc (NASDAQ:MU)  in its Q2 2024 investor letter. Here is what the firm said:

“Quarterly Performance Stock selection in the IT sector proved to be the largest contributor to performance, particularly driven by the strong performance of Micron. The company, which designs, develops, manufactures and sells memory and storage products, continued its strong performance alongside other AI beneficiaries as the anticipated demand for new and additional storage essential for housing and training large language AI models continues to grow.”