We recently published a list of the top 10 AI news stories and analyst ratings you can't miss, and Micron Technology Inc (NASDAQ:MU) ranks sixth on the list, so it's worth taking a closer look.
Investors are on edge ahead of Jensen Huang's AI giants' earnings announcements. Gene Munster, managing partner at Deepwater Asset Management, said in an interview with CNBC that if the Blackwell-related delays have a broader impact on the AI chip market, it could send the broader market into a pullback. The analyst predicted a “tough week” for big tech companies.
But in the long term, Munster is very bullish on the AI sector in general.
“I believe we're just getting started on this three-to-five-year AI-driven tech bull market, and these big tech companies are going to continue to do well for the next few years,” Munster said.
Analysts said Jensen Huang has suggested in previous quarters that demand for AI chips is beyond the company's ability to meet in the near term, and if he reiterates that in upcoming earnings calls, it would send a strong signal to investors about the potential of AI.
“There's a lot of awareness about AI, but I don't think the market has fully appreciated the importance it brings.”
In this article, we've summarized the most important latest AI news and analyst ratings on the leading AI technology stocks. For each company, we've mentioned the number of hedge fund investors. Why are we interested in stocks that hedge funds are flooding with? 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 each quarter and has returned 275% since May 2014, beating the benchmark by 150 percentage points (more here).
Is Micron Technology Inc (NASDAQ:MU) in the top 10 AI news and analyst ratings you can't miss?
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Micron Technology, Inc. (NASDAQ:MU)
Number of hedge fund investors: 120
Micron Technology Inc. (NASDAQ:MU) will be one of the best performers if volatility in the semiconductor industry subsides and the overall market recovers, Bank of America analyst Vivek Arya said in a new report.
BofA Securities believes Micron Technology Inc (NASDAQ:MU) is one of the hardest-hit tech stocks that presents an attractive entry point following its recent offering.
Bank of America analyst Vivek Arya also recently spoke out about the recent sell-off in semiconductor stocks, but he said most of the decline is due to temporary factors and that fundamentals remain “sound.”
“AI remains the strongest and most reliable area for capital investment, driven by domestic technology companies with strong balance sheets, proven monetization and mission-critical imperatives,” Arya said.
The story continues
Micron Technology Inc. (NASDAQ:MU) recently reported better-than-expected quarterly earnings, but the market didn't cheer the company for its disappointing performance and higher expenses. However, this short-term view misses the fact that Micron Technology Inc. (NASDAQ:MU) is investing heavily in high-bandwidth memory (HBM) production, which is expected to generate hundreds of millions of dollars in revenue in fiscal 2024 and billions of dollars by fiscal 2025.
Following the earnings release, Arya reaffirmed his buy recommendation on Micron Technology Inc (NASDAQ:MU) with a $170 price target.
“Management emphasized that both FY24 and FY25 production volumes have already been sold out and pricing is largely secured, leading to healthy sales and margin expansion (HBM is a revenue driver for GM),” Arya said.
Here's what Micron Technology Inc (NASDAQ:MU) had to say about HBM during its third-quarter earnings call:
“The expansion of our HBM shipments began in fiscal third quarter with HBM3E revenue exceeding $100 million during the quarter, driving DRAM and overall company margins. We expect to generate hundreds of millions of dollars in revenue from HBM in fiscal 2024 and billions of dollars in fiscal 2025. We expect to achieve HBM market share equal to our overall DRAM market share during calendar year 2025. Our HBM is sold out for calendar years 2024 and 2025 and the vast majority of our 2025 supply is already price contracted. We have designed our industry-leading HBM technology into key HBM customers and are making great progress in expanding our HBM customer base in calendar year 2025. We are already sampling our 12-stage HBM3E products and plan to begin volume production in calendar year 2025 with increasing product mix throughout 2025.”
In its Q2 2024 investor letter, ClearBridge Value Equity Strategy said the following about Micron Technology, Inc. (NASDAQ:MU):
“Stock selection in the IT sector proved to be the largest contributor to performance, especially driven by the strong performance of Micron Technology, Inc. (NASDAQ:MU). The company, which designs, develops, manufactures and sells memory and storage products, continues to perform well along with other AI beneficiaries as demand for new and additional storage, which is essential for storing and training large-scale language AI models, is expected to continue to increase.”
Overall, Micron Technology Inc (NASDAQ:MU) ranks 6th on Insider Monkey's list of “Top 10 AI News and Analyst Ratings You Can't Miss.” While we acknowledge MU's potential, we believe AI stocks have a better chance of delivering higher returns in a shorter time frame. If you're looking for AI stocks that are more promising than MU but trade at less than 5x stock price, check out our report on the cheapest AI stocks.
Read next: Analyst sees new $25 billion 'opportunity' in NVIDIA, Jim Cramer recommended these 10 stocks in June.
Disclosures: None. This article was originally published on Insider Monkey.
