We recently published a list of 16 trending AI stocks based on the latest analyst ratings and news, and in this article we'll take a look at how Micron Technology (NASDAQ:MU) stands relative to other trending AI stocks.
In recent months, the AI industry has created explosive opportunities in the development and deployment of AI infrastructure. Companies offering AI chips, cloud services, and data storage solutions are poised to benefit from the growing demand for AI capabilities. For example, NVIDIA, a leading provider of AI chips, is expected to see its stock price rise 160% in 2024 due to the growing demand for powerful processing capabilities in AI applications. Similarly, cloud service providers such as Amazon Web Services and Microsoft Azure have seen a surge in demand for AI and machine learning services, making them attractive choices for investors.
For more on these trends, check out “The 33 Most Important AI Companies to Watch” and “20 Industrial Stocks Already Riding the AI Wave.”
However, amid all the noise around this new technology, investors should also pause to consider the risks and challenges associated with AI. Regulatory scrutiny of AI companies is increasing, especially around issues around data privacy, algorithmic bias, and the ethical use of AI. Governments around the world have begun to introduce regulations that may impact how AI technologies are developed and deployed. For example, the European Union has proposed an AI Act that seeks to create a regulatory framework that fosters innovation while addressing the risks associated with AI. This regulatory environment may lead to increased compliance costs and lower adoption rates in certain areas, posing potential risks for investors.
Another key consideration for investors is the talent shortage in the AI industry. The demand for skilled AI professionals far exceeds the supply, resulting in fierce competition among companies for top talent. This talent gap may slow the development and adoption of AI technologies, especially among smaller companies that do not have the resources to compete for talent with large technology companies like Google and Microsoft. Despite these challenges, the overall outlook for the AI industry remains very bright. Continued advancements in AI technology and its increasing integration into various sectors provide a strong foundation for future growth.
For more on these developments, see “Billionaire Stan Druckenmiller Invests in AI Infrastructure, Tobacco, Industrial Stocks” and “10 Tech Stocks to Watch Amid Market Volatility, Bernstein Analysts Say.”
Our Methodology
In this article, we selected AI stocks based on the latest news and analyst ratings. These stocks are also popular among hedge funds. Why are we interested in stocks that hedge funds are flooding? The reason is simple: our research shows that you can outperform the market by mimicking the top picks of the best hedge funds. Our quarterly newsletter strategy selects 14 small and large stocks every quarter and has returned 275% since May 2014, beating the benchmark by 150 percentage points (more details here).
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Micron Technology (NASDAQ:MU)
Number of hedge fund holders: 120
Micron Technology (NASDAQ:MU) manufactures and sells memory and storage products. Earlier this week, media reported that the company would acquire two fabs owned by Taiwanese company AUO in a deal worth up to $620 million. The facilities will be used to expand the company's integrated circuit packaging and testing services, as well as increase production of high-bandwidth memory. The move comes amid rising AI capital spending due to growing demand for AI data centers, which use memory and storage products sold by Micron.
Micron Technology (NASDAQ:MU) is on guard on Wall Street, with Needham rating the stock a “buy” with a $140 price target. In a recent investor note, the advisor noted that the company's comments on bit shipments in its latest earnings report were incrementally more cautious than the guidance it provided in its previous earnings call, posing a risk to consensus expectations for the November quarter.
Overall, MU ranks #11 on our list of trending AI stocks based on the latest analyst ratings and news. While we acknowledge the potential of Micron Technology (NASDAQ:MU) as an investment, we believe some AI stocks have the potential to deliver higher returns in a shorter time frame. If you're looking for AI stocks that are more promising than Micron Technology (NASDAQ:MU) but still trade at less than five times earnings, check out our report on the cheapest AI stocks.
Read next: Michael Burry is selling these stocks and Jim Cramer is recommending these stocks.
Disclosures: None. This article was originally published on Insider Monkey.
