We recently published a list of 10 Best Stocks to Buy and Hold For 5 Years. In this article, we are going to take a look at where Micron Technology, Inc. (NASDAQ:MU) stands against other best stocks to buy and hold for 5 years.
Is Corporate America Celebrating the New Administration?
On November 7, Reuters reported that stocks in the United States were higher than usual after the Fed announced a 25 basis point rate cut, extending the rally fueled by the election results. The Fed decision came promptly after the job market showed signs of easing and inflation moved towards the Central Bank’s target of 2%. Most investors expect the new administration to ease taxes and regulations, all of which sparked all three of the major indexes. The S&P 500 and Dow, each logged their largest one-day percentage jumps in two years.
Now that the elections are over, investors are keen to know how will markets perform amid election results. On November 8, Bethany McLean, contributing editor at Vanity Fair, joined Catalysts on Yahoo Finance to discuss why businesses may be optimistic as the new president takes over the White House.
McLean emphasizes that investors foresee a myriad of benefits such as tax cut extensions, fewer regulations, and less aggressive antitrust oversight, all of which have sparked a surge in markets. Despite the possible benefits, she emphasizes it is difficult to predict what the administration is going to do at the moment.
McLean expects the new administration to be friendlier with companies in the technology sector, however, she remains fixated on waiting to see how the policies play out. She further adds that if any future policies made by the new administration negatively impact the stock market, she expects them to “switch course.”
On the flip side, some analysts maintain that the easing cycle has a greater bearing on the stock market than the elections, hinting that value names may be more important as of now. On November 7, Arup Datta, senior vice president at Mackenzie Global Quantitative, joined Wealth! on Yahoo Finance to share his market thesis as the 2024 elections come to a close.
Datta shares that he is extremely positive about the market but emphasizes that the win will have little impact on financial markets in the long term. Speaking of the magnificent seven, he adds focusing on quality names with positive growth and value for his investment portfolio helps him navigate the market in such conditions.
He suggests that while the magnificent seven have been the talk of the town for the past 18 to 21 months, he would like to “pivot away” from that by a little. Historically, value stocks have performed better amid an easing cycle, adds Datta.
As the new administration settles in and the Fed initiates its second cut of the cycle, the near-term market will most likely remain volatile. Speaking of the future, some names happen to promise long-term growth due to their proprietary revolutionary technologies and crucial investments.
Our Methodology
To come up with the 10 best stocks to buy and hold for 5 years, we sifted through multiple similar rankings and compiled an initial list of 20 stocks. We then ranked the top 10 based on their hedge fund sentiment at the end of Q2 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A close-up of a computer monitor showing a complex web of cloud-based technology.
Micron Technology, Inc. (NASDAQ:MU)
Number of Hedge Fund Holders: 120
Micron Technology, Inc. (NASDAQ:MU) ranks sixth on our list of the best stocks to buy and hold for 5 years. Its primary offerings include memory and storage products for computers, consumer electronics, artificial intelligence use cases, servers, and automobiles.
Speaking of artificial intelligence, on October 15, Micron Technology, Inc. (NASDAQ:MU) launched a new portfolio of memory solutions that are capable of fueling the new wave of AI PCs. Its corporate vice president, Dinesh Bahal, stresses the need for a memory paradigm shift as AI takes flight. To align with his stance, Micron is working relentlessly to meet the need for future AI workloads.
Following its fiscal fourth quarter 2024 results, Micron Technology, Inc. (NASDAQ:MU) raised its guidance for the next quarter and fiscal year 2025. On September 26, William Kerwin, analyst of technology at Morningstar Equity, appeared in an interview on Yahoo Finance, to discuss his thesis on MU. He shares that the company’s earnings results “were nothing short of impressive.” He adds that the company is currently undergoing a “cyclical upswing” in memory demand which he expects will continue in 2025.
Micron Technology, Inc. (NASDAQ:MU) is shifting its complete focus to meeting the demands for artificial intelligence and data center customers, two of the fastest-growing industries at the moment. The company expects demand for AI servers to continue to increase, positioning it as a major player in AI.
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.”
Overall, MU ranks 6th on our list of best stocks to buy and hold for 5 years. While we acknowledge the potential of MU to grow, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. 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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Disclosure: None. This article is originally published at Insider Monkey.
