MU - Why Micron Technology Is A Solid Investment For The Future Of Data Centers And AI

2024-04-19 11:24:12 ET

Summary

• Micron Technology beat analysts' revenue and earnings expectations the last time it reported earnings.
• The company is a beneficiary of the proliferation of Artificial Intelligence, which should drive multi-year growth.
• Its opportunities in the data center, PC, and smartphone markets position it for potential outperformance in the coming years.

As of April 1, Bankrate highlighted Micron Technology (NASDAQ: MU ) as the fifth-best performing S&P 500 stock in 2024, with a 38.1% return. Investors are optimistic that this cyclical memory semiconductor manufacturer may be near the beginning of a multi-year run higher because they are beginning to notice improvements in recent earnings results. The company reported second-quarter fiscal year ("FY") 2024 earnings on March 20; the results surprised analysts and investors. Analysts expected the company to produce an adjusted earnings-per-share ("EPS") loss of $0.24. Instead, Micron shocked the market with an adjusted EPS profit of $0.42 per share. The company also beat analysts' revenue forecasts and gave guidance above analysts' expectations.

Even better, management said the magic words that almost every investor wants to hear: Micron benefits from the proliferation of Artificial Intelligence ("AI"). Chief Executive Officer ("CEO") Sanjay Mehrotra said on the second quarter Fiscal year ("FY") 2024 earnings call , " We are in the very early innings of a multi-year growth phase driven by AI as this disruptive technology will transform every aspect of business and society. " Investors liked what they heard. The stock rose 14% the day after management released earnings. ...

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