16 Most Undervalued Stocks to Buy Now

1) Micron Technology, Inc. (NASDAQ:MU)

Forward P/E as of 22 August: 12.58x

Expected EPS Growth this Year: Over 100%

Number of Hedge Fund Holders: 120

Micron Technology, Inc. (NASDAQ:MU) historically focused on designing and manufacturing DRAM for PCs. The firm then expanded into NAND flash memory market.

The company’s management believes that Micron Technology, Inc. (NASDAQ:MU) should generate “several hundred million dollars” in HBM (high-bandwidth memory) revenue in FY24. The management is even optimistic for FY25. They believe the company has the potential to earn “multiple billions of dollars in revenue from HBM.”

Micron Technology, Inc. (NASDAQ:MU) has sold out its HBM capacity for this year and the following year.

Now, it focuses on winning a bigger share of the HBM market. This is expected to take place by expanding the customer base and developing HBM chips which could deliver more power and efficiency. The growth in the HBM market is directly related to the increased Al-chip demand. Therefore, an Al-fueled rally in the memory market should help the company in delivering earnings growth.

The rebound in memory prices and favorable inventory balances continue to work in the favor of Micron Technology, Inc. (NASDAQ: MU), helping it to post strong revenues. In 3Q 2024, the company saw 17% sequential revenue growth, exceeding its guidance range, to $6.81 billion. This was seen on the back of strong Al demand and healthy execution.

Analysts at Rosenblatt Securities gave a “Buy” rating on the shares of Micron Technology, Inc. (NASDAQ:MU), issuing a $225.00 price objective on 25th June.

ClearBridge Investments, an investment management company, released its second quarter 2024 investor letter and mentioned Micron Technology, Inc. (NASDAQ:MU). Here is what the fund said:

“Stock selection in the IT sector proved to be the largest contributor to performance, particularly driven by the strong performance of Micron Technology, Inc. (NASDAQ:MU) The company, which designs, develops, manufactures and sells memory and storage products, continued its strong performance alongside other AI beneficiaries as the anticipated demand for new and additional storage essential for housing and training large language AI models continues to grow.”

While we acknowledge the potential of MU as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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