We recently published a list Jim Cramer Latest Portfolio: 10 Best Stocks to Buy. Since Micron Technology Inc (NASDAQ:MU) was on the list, it deserves a deeper look.
Jim Cramer in his latest program talked about discipline during short-term market rallies and emphasized the importance of knowing when to take some profits off the table when things are going your way. According to Cramer, the “most important lesson” in short-term rallies is that “you always have to work hard to prepare yourself for the future.”
Cramer said that you should not “give in” to the market euphoria and hit “buy, buy, buy” when the market is “roaring.” The CNBC host said for many it becomes difficult to sell because they feel they were late to the rally and want to hold on to their best-performing stocks during bull runs. But Cramer questioned this thinking: if your portfolio sees big gains and you let it “ride” the rally without selling any stocks and eventually those gains begin to “evaporate,” how is that different from totally missing out on the rally? “It isn’t,” Cramer said.
Cramer talked about the post-COVID rally of 2020 and 2021 where the market saw an “unbelievable” bull run, only to pare those gains after the Fed’s pivot and its “war” on inflation. Jim Cramer advised investors to always remain “tethered” to reality.
“If you would have sold stocks gradually on their way up as I told you to do you’d have been in a much better shape as the market spent the next 11 months getting obliterated,” said Cramer.
For this article we watched several latest programs of Jim Cramer aired over the past few days and picked 10 stocks he’s bullish on. With each stock we have mentioned the number of hedge fund investors. 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).
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Micron Technology Inc (NASDAQ:MU)
Number of Hedge Fund Investors: 115
Jim Cramer said in a latest program on CNBC that he believes Micron Technology Inc (NASDAQ:MU) could go “much higher.”
“They’ve got the lowest cost of production, they have got a terrific CEO and it’s an inexpensive stock.”
UBS recently maintained a Buy rating on Micron Technology Inc (NASDAQ:MU) and increased its price target on the stock to $155 from $125, citing its industry checks pointing to higher prices in the DRAM and NAND memory industry. UBS said that Micron Technology Inc’s (NASDAQ:MU) valuation could become attractive once its gross margin peaks in the fourth quarter of 2025 . UBS expects Micron Technology Inc’s (NASDAQ:MU) EPS in 2025 to come in at around $17.50.
During the fiscal second quarter, out of its four segments, three segments saw a 50% growth on a YoY basis. At the consolidated level, Micron Technology Inc (NASDAQ:MU) saw a 58% YoY revenue growth. During fiscal Q3, Micron Technology Inc (NASDAQ:MU) expects revenue growth to increase to 76%. Analysts believe Micron Technology Inc (NASDAQ:MU) is expected to keep growing faster amid a rising demand for its chips that power Cloud and AI servers. Micron HBM3E, one of Micron Technology Inc’s (NASDAQ:MU) most famous AI chips, has already sold out for 2024 and most of 2025.
According to data compiled by Yahoo Finance, Wall Street expects Micron Technology Inc’s (NASDAQ:MU) revenue growth to total 44% in 2025, while earnings growth is expected at 750% in the next year. The stock’s forward P/E ratio is 18, which is justified if Micron Technology Inc (NASDAQ:MU) is able to see sustained growth in the months to come.
Sequoia Fund stated the following regarding Micron Technology, Inc. (NASDAQ:MU) in its fourth quarter 2023 investor letter:
“Exits last year included Netflix, Bank of America and Micron Technology, Inc. (NASDAQ:MU). As discussed in our Q2 shareholder letter, we exited Micron after the rationale for our investment was strained by rising geopolitical tensions, which have increased investment risks in the high-performance semiconductor industry. These risks are bearable, but we felt it prudent to reduce the portfolio’s exposure to them. We think both Bank of America and Micron were purchased at conservative prices given the facts at hand, but the facts changed and we moved on.”
Overall, Micron Technology Inc (NASDAQ:MU) ranks 3rd on Insider Monkey’s list titled Jim Cramer Latest Portfolio: 10 Best Stocks to Buy. While we acknowledge the potential of Micron Technology Inc (NASDAQ:MU), our conviction lies in the belief that some 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 Micron Technology Inc (NASDAQ: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 on Insider Monkey.
