This article examines “Don’t Ignore This Market Rotation: Jim Cramer’s Views on Micron, Western Digital, and More”. Please visit “Don’t Ignore This Market Rotation: Jim Cramer’s Views on Intel, Vertiv, TSMC, and More“ if you’d like to see the extended list and methodology behind it.
5. Micron Technology, Inc. (NASDAQ:MU)
Micron Technology, Inc. (NASDAQ:MU) was among the stocks Jim Cramer discussed while explaining how investors can navigate the current market rotation. Cramer explained how to buy the stock, as he remarked:
The fairly similar Micron sells for less than 12 times earnings, and it seems compelling, down 6% today. I’ve been waiting for Micron to come down. This may be the opportunity [buy, buy, buy]… So what do you do as someone who’s always looking for bargains? I think Micron’s the only possibility that I heard in that whole list. It’s the hardware stock that can most easily turn itself around in the next move higher. I’d buy some right here and then wait for another, say 2 to 3% decline, to buy more. That’s how I’d get started.
Micron Technology, Inc. (NASDAQ:MU) develops memory and storage solutions, including DRAM, NAND, and SSD products, under the Micron and Crucial brands. Cramer highlighted the company while discussing the memory and storage supply shortage during the May 8 episode, as he commented:
These days, the big winners are the memory and data storage stocks. Micron’s up 777% over the past 12 months alone. Sandisk’s up 4,162%. Western Digital’s gained 984%. Seagate jumped 712% over the same period. But these are real companies that make real things. And right now, they’re practically just printing money simply because there’s so much demand and so little supply. Believe it or not, but they may all be undervalued because of this fourth industrial revolution… Earlier this week, I told you that some stocks are galloping higher because they have to go where they have to go. It sounded like circular reasoning, I understand that.
We keep seeing it happen, though. Micron rallied another 15% today to $746. Why? 746, why? Because it’s going to $1,000. It needs to go through the 700s, 800s, and 900s to get there. Even after… $1000, the stock would still be pretty… cheap on an earnings basis. Micron can keep running because there’s endless demand for its chips from the data center companies and not enough supply, so pricing just gets better and better and better. Right now, the stock sells for just six times earnings. Same exercise with Sandisk. In fact, it could be even cheaper than Micron, despite already rallying a lot harder.
So what do you do? Unlike the old days when we were flipping the dot-com IPOs, you gotta pick some of these moonshots and stick with them… As long as you have some cash on the sidelines and your portfolio has some diversification, you have my blessing to buy these red-hot stocks, even if you missed them, even if you missed a lot, even if you’re just getting in on Monday. If you have nothing but the memory plays and someone comes up with a… mousetrap, you’re going to lose a lot of money, hence the need to diversify among the plays. But of all the people I’ve talked to in the business, nobody knows of anyone who’s even trying to tackle a memory shortage, so these stocks keep running and running. And it’s not too late to buy them here because the price-to-earnings multiples are simply too low.
