We recently published a list of 10 Buzzing AI Stocks on Latest Analyst Ratings and News. In this article, we are going to take a look at where Micron Technology, Inc. (NASDAQ:MU) stands against other buzzing AI stocks on latest analyst ratings and news.
CJ Muse, Cantor Fitzgerald analyst, explained in a latest program on CNBC that the AI investment cycle is different from the ones we have seen in the past. Muse believes major technology companies investing billions in AI are generating “meaningful” free cash flows.
“This cycle is unlike any other. I think most investors look back to the advent of the internet and how long the internet infrastructure investment cycle played out. But this one’s very different. The companies making the investments, predominantly the hyperscalers, are generating meaningful free cash flow despite spending hundreds of billions of dollars building out AI. Let’s be clear: this is existential for these companies as they all try to get to AGI. I think this is a multi-year investment cycle.”
The analyst talked about the latest AI model released by OpenAI and said the race is now to reach artificial general intelligence (AGI) and companies would require more and more computing power to improve the reasoning capabilities of AI systems.
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A close-up view of a computer motherboard with integrated semiconductor chips.
Micron Technology Inc (NASDAQ:MU)
Number of Hedge Fund Investors: 107
Matthew Bryson from Bright Lake Wealth Management said while talking to Schwab Network in a latest program that he believes Micron Technology’s (NASDAQ:MU) problems are temporary in nature.
“I think that a lot of the problems are very temporal in nature. Certainly, the extent of the decline was a bit of a surprise. But where you’ve got inventory right-sizing in handsets of smartphones, that’s not an end-market problem. It’s that our customers took on too much inventory, mostly late 2023. It just needs to get worked out, and I think that’s done by the end of Q1.
I think Blackwell delays, where business hasn’t disappeared but system builds have gotten pushed, are weighing on Q4 and Q1. Again, people are going to buy lots of Blackwell, so I think this is a one-to-two-quarter phenomenon. You end up with a relatively positive cycle for Micron Technology Inc (NASDAQ:MU) in the back half of calendar 2025.”
How can Micron Technology Inc (NASDAQ:MU) make a turnaround?
The company’s management expects PC unit growth to accelerate into the second half of calendar 2025. Nvidia’s (NVDA) Blackwell has only just begun ramping up production and 2025 is expected to show improved sequential and annual comparisons. Micron Technology Inc (NASDAQ:MU) management has also guided for a return to growth in the second half of the fiscal year and raised the estimate of the HBM market’s total addressable market to over $30 billion in 2025, driven by their sold-out position for the calendar year.
Based on these factors, now could be the right time for long-term investors to pile into MU.
Invesco Growth and Income Fund stated the following regarding Micron Technology, Inc. (NASDAQ:MU) in its Q3 2024 investor letter:
“Micron Technology, Inc. (NASDAQ:MU): In late June, Micron reported earnings that were generally in line with expectations. However, management provided weaker guidance going forward. The stock immediately began to sell off, which continued through the third quarter as investors appeared to question the company’s long-term growth outlook. Rotation out of AI-related stocks also appeared to weigh on Micron Technology.”
Overall, MU ranks 5th on our list of buzzing AI stocks on latest analyst ratings and news. While we acknowledge the potential of MU, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher 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.