We recently compiled a list of the 8 Best Stocks to Buy for High Returns in 2024. In this article, we are going to take a look at where Micron Technology Inc. (NASDAQ:MU) stands against the other stocks to buy for high returns.
The broader market reached new record highs on October 11, driven by financial stocks posting stronger-than-expected quarterly results. Adding to investor optimism is the recent decline in U.S. inflation, which dropped to 2.4% in September, moving closer to the Federal Reserve’s 2% target. This has fueled hopes of a potential quarter-point rate cut at the Fed’s November meeting. As of October 16, the S&P 500 stood at 5842.47, only eight months after surpassing the 5,000 mark for the first time. Additionally, the September Consumer Price Index revealed a sharper-than-expected rise in consumer prices. However, Omair Sharif, president of Inflation Insights, told Yahoo Finance that while inflation data exceeded expectations, housing inflation is beginning to cool. He also noted a significant decline in food prices since the post-COVID surge, suggesting there are several positive trends to take away from the current market situation.
Adding to that, Carson Group’s chief market strategist, Ryan Detrick, believes the current bull market is still in its early stages, with more gains to come. However, he doesn’t foresee a repeat of the strong returns seen in 2023 and 2024, when the S&P 500 rose 24% and 22%, respectively. Instead, Detrick expects more moderate growth, noting that the average gain for stocks in the third year of a bull market is around 8%, aligning with the typical annual return.
Meanwhile, Jay Woods, chief global strategist at Freedom Capital Markets, highlighted that one of the most striking aspects of the current bull market is how few investors believed in it from the start:
“I think it’s important to preface it with when it started, no one believed it. They just thought it was a bear market rally. And then they doubted that it had legs, and then it was just seven stocks. And now, all of a sudden, it is powerful. And I think the momentum is continuing. You got the rate cycle, you got broadening out, we have wind at our sails, and this bull market should last at least another 12, maybe 18 months.”
On another front, strategists warn that future market gains will hinge on identifying sectors with strong earnings growth. As Artificial Intelligence becomes a key driver of market performance, attention will turn to its impact on profitability across various industries. UBS notes that October has historically been the most volatile month for tech stocks, with the Nasdaq 100 showing an average volatility of 26% in October over the past 40 years, compared to 22% in other months. Given the current geopolitical uncertainties and concerns around export controls, the bank anticipates increased volatility in tech stocks in the near term.
Our Methodology
To compile our list of the best stocks for high returns, we focused on some of the top companies in Insider Monkey’s database that have ana average analyst upside of at least 30%. These companies were then ranked based on their upside potential, in ascending order. We have also mentioned the number of hedge fund investors that held stakes within each company in the second quarter of 2024, out of a total of 912 hedge funds.
At Insider Monkey, we are obsessed with 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)
Average Analyst Upside: 37.37%
Number of Hedge Fund Holders: 120
Micron Technology Inc. (NASDAQ:MU) is a leading provider of memory and data storage solutions, including dynamic random-access memory (DRAM), flash memory, and solid-state drives (SSDs).
TD Cowen recently boosted Micron Technology’s price target to $135 from $115, maintaining a Buy rating on the stock. The firm’s optimism stems from the belief that the anticipated downturn in the memory market will be less severe than expected. Key upcoming milestones are likely to drive the stock’s momentum, including the qualification of Micron’s B100 series, the ramp-up of its 12H High Bandwidth Memory (HBM), and improved supply chain visibility projected for Q2 2025 in the PC and mobile markets.
In Q4 2024, Micron posted a net income of $887 million on $7.75 billion in revenue, a 93% jump from $4 billion in the same quarter last year. Non-GAAP earnings were $1.18 per share. For Q1 2025, Micron expects revenue to hit $8.7 billion, exceeding Wall Street’s projection of $8.21 billion.
As of Q2 2024, 120 hedge funds held stakes in Micron, with a total value of $5.2 billion.
Baird Chautauqua International and Global Growth Fund stated the following regarding Micron Technology, Inc. (NASDAQ:MU) in its Q3 2024 investor letter:
“After Micron Technology, Inc.’s (NASDAQ:MU) price appreciated 54% in 1H24, investors became anxious about potential memory weakness, less clear cyclical recovery pace, and whether competitor Samsung will act rationally with capacity expansion. We maintain our long-term positive view on the industry’s demand/supply situation. We believe Micron is well positioned in technology capability, and that its margins will continue to improve.”
Overall MU ranks 6th on our list of the best stocks to buy for high returns in 2024. While we acknowledge the potential of MU as an investment, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you’re seeking an AI stock with even more promise than MU and trading 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.