We recently compiled a list of the 10 Best Cheap Technology Stocks To Buy According to Analysts. In this article, we are going to take a look at where Micron Technology, Inc. (NASDAQ:MU) stands against the other cheap technology stocks.
Doug Clinton, the founder and CEO of Intelligent Alpha, joined a discussion on CNBC’s ‘Squawk Box’ on February 12 regarding the state of the tech sector, AI tech race, how heavy AI investments and tariff uncertainty have affected mega-cap tech stocks over the past month. When asked to rate how bad it has been on a scale of 1 to 10, Clinton replied that about 2.5 weeks ago, during what he called “Deep Tech Monday,” it was probably around an 8.5 or 9 due to significant pressure. However, since then, things have calmed down following the earnings reports from hyperscalers like Google and statements from industry leaders such as Sam Altman indicating that the capital expenditure boom in AI will continue.
Clinton emphasized that while they remain bullish on tech overall, not all companies are equally leveraged to AI. For instance, Meta is highly exposed due to its leadership in open-source AI with models like Llama. Google and NVIDIA are also heavily tied to AI advancements. On the other hand, Amazon and Apple might have less exposure compared to other hyperscalers. Interestingly, the iPhone maker recently made a deal with Alibaba to integrate their AI models onto iPhones in China. Regarding tariffs and trade tensions with China, Clinton suggested that while these issues should be monitored for hyperscalers who have significant chip production exposure, he does not believe they will be overly impacted by tariffs due to their limited involvement in import/export activities directly affected by tariffs. Instead of focusing heavily on tariff risks at this point, he believes it’s more important for investors to track how well these companies’ AI products evolve and how customers adopt them.
He also expressed skepticism about a protracted trade war with China under Trump’s negotiation tactics. He noted similarities with recent negotiations involving Canada and Mexico where border policies were adjusted without prolonged conflict over tariffs. While acknowledging potential impacts if tensions escalate significantly, particularly affecting chip producers, Clinton does not foresee this as an immediate concern within the next year. If China were involved in a protracted trade war with the US, it could be very bad for some companies. However, Clinton doesn’t think this scenario is likely because Trump often seeks quick negotiating wins rather than prolonged conflicts.
Methodology
We used a stock screener to compile a list of tech stocks with a forward P/E ratio of under 15. We then selected 10 stocks that had high average upside potential (over 30%) and were the most popular among elite hedge funds. The stocks are ranked in ascending order of their average upside potential. We’ve also added the hedge fund sentiment for each stock which was sourced from Insider Monkey’s database.
Note: All data is sourced as of February 13.
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)
Forward P/E Ratio: 12.48
Average Upside Potential: 58.16%
Number of Hedge Fund Holders: 107
Micron Technology, Inc. (NASDAQ:MU) designs, manufactures, and sells memory and storage products globally. It operates through four business units: Compute and Networking, Mobile, Embedded, and Storage. It provides DRAM, NAND flash memory, and other storage solutions under the Micron and Crucial brands. It serves markets for data centers, PCs, graphics, networking, automotive, industrial, and mobile devices.
Morgan Stanley analyst Joseph Moore lowered the company’s price target to $91 from $98 on February 12, maintaining an Equal Weight rating. Moore cited potential deflationary effects from DeepSeek’s AI innovations and the possibility of increased export controls or reduced spending enthusiasm in the AI sector. Despite this, he remains positive on the semiconductor sector overall.
But Micron Technology, Inc. (NASDAQ:MU) is investing heavily in AI-related infrastructure. It has begun construction of a $7 billion High-Bandwidth Memory advanced packaging facility in Singapore, scheduled to begin operations in 2026. This facility, the first of its kind in Singapore, will support growing AI demand and expand the company’s advanced packaging capacity by 2027, creating 1,400 initial jobs with plans to reach 3,000.
It’s also expanding its consumer product line with offerings relevant to AI applications. New additions to the Crucial lineup include the high-speed Crucial P510 SSD and expanded DRAM options, such as the 32GB Crucial DDR5 Pro Overclocking Gaming Memory and the 64GB DDR5 Pro Plug-and-Play Memory. These products offer faster, more power-efficient solutions for various users, including those working with AI-driven applications.
Parnassus Value Equity Fund is positive on the company’s prospects, due to the revenue growth in its memory segments and its advantageous position to benefit from AI-driven demand. It 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.”
Overall MU ranks 3rd on our list of the best cheap technology stocks to buy according to analysts. While we acknowledge the potential of MU as an investment, 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.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.
