CA - Micron: CHIP Grants Are Rocket Fuel (Rating Upgrade)

2024-04-24 12:41:22 ET

Summary

• Micron Technology, Inc. is set to benefit from a U.S. government grant, which will boost its competitive stance in high-margin, high-demand areas such as AI applications.
• The company's recent developments in AI DRAM utilization and partnerships with Nvidia for HBM3e memory for AI GPUs are expected to drive sustained growth and profitability.
• Micron's commitment to building chip plants in New York and Idaho, supported by government incentives, will strengthen the U.S. semiconductor supply chain and position the company for long-term success.

Investment Thesis

As global tensions have heightened, demand for a secure and advanced semiconductor supply chain have grown, and I think Micron Technology, Inc. (MU) is rising to the occasion. I believe the U.S. government’s recent $6.1 billion grant for Micron will boost its competitive stance in high-margin, high-demand areas, especially AI applications. Its commitment to build chip plants in New York and Idaho will benefit U.S. strategic initiatives aligned with the burgeoning demand in AI and high-performance computing for commercial and defense applications. In my opinion, this will be rocket fuel for their business....

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