1. Micron Technology Inc. (NASDAQ:MU)
Average Upside Potential: 39.00%
Number of Hedge Fund Holders: 120
Micron Technology Inc. (NASDAQ: MU) is a global semiconductor company that designs, manufactures, and sells memory and storage solutions, with a primary focus on DRAM and NAND flash memory (accounting for 69% and 31%), which are essential components in a wide range of electronic devices. Its products are used in applications that require high-performance, high-capacity memory and storage solutions.
The company recently launched a new high-performance SSD with up to 2TB capacity and 7,100/6,000 MB/s read/write speeds. Its revenue surged 93.27% in the fourth fiscal quarter of 2024, driven by strong NAND and storage demand. Overall, in the fiscal year 2024, it grew its revenue by 62%. Its 16Gb LP5 DRAM has been qualified for the automotive market, supporting AI advancements. Despite market adjustments, the company expects automotive growth to resume in the second half of fiscal 2025.
It recently launched new high-speed memory (CUDIMM and CSODIMM) for next-generation PCs, especially AI models. These modules are twice as fast as DDR4 and are validated by Intel for their Core Ultra processors. The new memory offers faster downloads, and better refresh rates, and is expected to be a big leap for future PCs.
The company’s bullish outlook is driven by its strategic focus on the AI and data center markets. While it faces challenges in the smartphone and PC segments, its strong leadership in process technologies and growing revenue in high-demand sectors position it for significant long-term growth. The CEO’s positive outlook and forecast for record revenue and increased profitability in the coming quarters highlight Micron Technology Inc.’s (NASDAQ:MU) promising future.
Baird Chautauqua International and Global Growth Fund stated the following regarding Micron Technology, Inc. (NASDAQ:MU) in its Q3 2024 investor letter:
“After Micron Technology, Inc.’s (NASDAQ:MU) price appreciated 54% in 1H24, investors became anxious about potential memory weakness, less clear cyclical recovery pace, and whether competitor Samsung will act rationally with capacity expansion. We maintain our long-term positive view on the industry’s demand/supply situation. We believe Micron is well positioned in technology capability, and that its margins will continue to improve.”
While we acknowledge the growth potential of Micron Technology Inc. (NASDAQ:MU), our conviction lies in the belief that AI stocks hold great promise for delivering high 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.
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