1. Micron Technology (NASDAQ:MU)
Upside Potential: 86.66%
Average Analyst Price Estimate: $173.74
Micron Technology (NASDAQ:MU) designs, develops, manufactures, and sells a wide range of memory and storage chips, including DRAM, NAND flash, and solid-state drives (SSDs) to major technology companies such as Microsoft, Apple, Dell, IBM, Nvidia, HP, Lenovo, and Samsung along with automotive manufacturers, telecom providers, government agencies, and research institutions globally.
Micron Technology (NASDAQ:MU) produces the world’s best high-bandwidth memory (HBM) storage devices for data centers that enhance GPU performance by fast storing and data processing. The new HBM3E architecture chips developed by Micron Technology (NASDAQ:MU) deliver better performance, have a smaller physical size, and use 30% less energy than competing products compared to memory generations, making it more cost-effective for data center operators.
In its second quarter investor letter, the ClearBridge Value Equity Strategy stated the following regarding Micron Technology, Inc. (NASDAQ:MU):
“Stock selection in the IT sector proved to be the largest contributor to performance, particularly driven by the strong performance of Micron Technology, Inc. (NASDAQ:MU) 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.”
For the three months ended on May 30, Micron Technology (NASDAQ:MU) generated a revenue of $6.81 billion, up 82% compared to the same quarter in the previous year and surpassing expectations by $140 million. The company reported earnings of $0.62 per share, beating estimates by $0.09. Looking ahead, Micron Technology’s (NASDAQ:MU) next quarter earnings are forecasted to reach $1.08 per share, with revenues projected at $7.6 billion, reflecting continued strong demand.
As Micron Technology (NASDAQ:MU) continues to innovate and expand its product portfolio, particularly in high-growth areas like AI, the company is well-positioned to achieve its ambitious revenue of $25 billion in the financial year 2024, representing a 61% year-over-year increase. The stock is trading at $93.08 as of August 12. Industry analysts have a consensus on the stock’s Buy rating, setting an average share price target at $173.74, which represents an 86.66% upside potential from its current level.
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 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.
READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure. None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and investors. Please subscribe to our daily free newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
