1. Micron Technology, Inc. (NASDAQ:MU)
Forward P/E Ratio: 12.11
Earnings Growth This Year: 588.50%
Number of Hedge Fund Holders: 120
Micron Technology, Inc. (NASDAQ:MU) is the best cheap growth stock to invest in now. It operates as a leading technology company that specializes in memory and storage solutions. Its Dynamic Random-Access Memory (DRAM) is pertinent when it comes to computers and mobiles accessing data quickly. Moreover, they also develop NAND Flash Memory which is used in SSDs to store data at a quick speed.
The company has surprised its investors by posting fourth quarter results which were above analyst and management expectations. Not only this, management has also pointed out towards continued growth in the next fiscal year.
Revenue for the fourth quarter was up 93% year-over-year amounting to $7.8 billion. Whereas the overall revenue for the fiscal 2024 was up 62% on a year-over-year basis as well and amounted to $25.1 billion. This growth was on the back of artificial intelligence effectiveness and their strong performance in the data center and automotive industries. Micron Technology, Inc. (NASDAQ:MU) has very recently started investing in these high-growth industries and is experiencing high demand for its memory and storage solutions.
Management believes that the company is entering the new fiscal year with the strongest competitive capability ever. Management has also pointed towards a high demand from data centers which is exceeding its expectations. It is expecting revenue for the first quarter of 2025 to be around $8.70 billion with gross margins at 39.5%.
Lastly, its cheap valuation is another point of attraction for its customers. Micron Technology, Inc. (NASDAQ:MU) is trading at 12 times its forward earnings. Analysts expect a sharp increase of 588% in its earnings during the year.
Parnassus Value Equity Fund stated the following regarding Micron Technology, Inc. (NASDAQ:MU) in its Q2 2024 investor letter:
“Micron Technology, Inc. (NASDAQ:MU) posted fiscal-third-quarter results that met expectations. Micron’s DRAM (dynamic random access memory) and NAND (non-volatile storage technology) segments grew revenue strongly, continuing the company’s recovery from a cyclical downturn last year. We believe Micron is well positioned to capitalize on AI-driven demand for greater memory.”
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 a promising AI stock 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.
