We recently published a list of 8 Best Machine Learning Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where Micron Technology, Inc. (NASDAQ:MU) stands against other best machine learning stocks to buy according to hedge funds.
Earlier this month, the president of Potomac Wealth Advisors, Mark Avallone, discussed the tech sector’s investment potential. We talked about his sentiment in more detail in one of our other articles, 12 Best NASDAQ Stocks To Buy in 2025. Here’s an excerpt from it:
“He noted that market rates have surged to all-time highs, with a significant increase of 1,800 points since October 2023. Avallone emphasizes that tech stocks, particularly cash-flowing mega-cap and large-cap companies, have shown resilience against rising rates, attributing this to improved operational efficiencies and ongoing technology spending even in a slowing economy.”
Just like Avallone, several analysts hold a positive outlook for tech stocks as we go into 2025. Daniel Ives, Global Head of Technology Research at Wedbush Securities, thinks that the AI revolution is driving this strength in tech. On January 13, he appeared on CNBC and discussed the tech sector in light of rising interest rates and a strengthening dollar. He noted that the 10-year Treasury yield is currently at 4.75%, which is exerting pressure on tech stocks. Despite this, Ives expressed optimism about the sector’s potential for growth and suggested that the current environment presents opportunities to invest in leading companies. He emphasized that capital expenditures are robust on the consumer side and indicate stronger-than-expected earnings ahead. Ives believes that we are only halfway through the bull market, which he views as a positive sign for tech stocks moving forward.
Ives discussed Palantir Technologies, which has faced selling pressure despite being a top S&P 500 performer last year. He warned that overlooking it due to high valuation could mean missing key market opportunities, similar to Oracle and Salesforce, especially with $2 trillion in expected AI capital expenditures. Ives also highlighted the impact of a rising dollar on tech, particularly Apple’s vulnerability, while remaining bullish on the sector. He emphasized the need for diversification, citing Microsoft and NVIDIA as indicators for AI growth.
His optimism about the tech sector highlights opportunities as investors navigate this landscape.
Methodology
We first sifted through ETFs, online rankings, and internet lists to compile a list of the top ML stocks. We then selected the 8 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q3 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
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 view of a computer motherboard with integrated semiconductor chips.
Micron Technology, Inc. (NASDAQ:MU)
Number of Hedge Fund Holders: 107
Micron Technology, Inc. (NASDAQ:MU) makes memory and storage solutions. It serves many markets, ranging from data centers to mobile devices. It designs, manufactures, and sells a portfolio of products, including DRAM, NAND, and NOR flash memory, under the Micron and Crucial brands, and through private labels as well.
The company is benefiting from the surging AI market demand. J.P. Morgan reiterated its Overweight rating and $180 price target in mid-December 2024, expecting a recovery in the memory market by late 2025. This will be driven by strong AI server demand and tight DRAM supply. The analyst expects the stock to perform well in H1 2025 as investors anticipate a market rebound.
In FQ1 2025, management highlighted that AI server demand is driving data center SSD growth. Its market share exceeded $1 billion in quarterly revenue. This is fueled by the advancements in AI, particularly in areas like machine learning and deep learning, which require high-performance storage solutions to handle massive datasets. Additionally, despite near-term headwinds, Micron Technology, Inc. (NASDAQ:MU) expects to maintain its market share in both DRAM and NAND.
It anticipates a gradual increase in HBM (High-Bandwidth Memory) revenue as it ramps up production and transitions to taller stacks of HBM chips (12-high). Therefore, the company is constructing a $7 billion HBM advanced packaging facility in Singapore. This facility will begin operations in 2026 and reach full capacity by 2027. While the full impact of this investment will be seen in the future, it supports the anticipated memory market recovery driven by AI.
Overall, MU ranks 8th on our list of best machine learning stocks to buy according to hedge funds. While we acknowledge the growth potential of MU, our conviction lies in the belief that AI stocks hold great promise for delivering high 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.
