We recently compiled a list of the 15 Semiconductor Stocks Making Impressive Comeback From DeepSeek AI Dip. In this article, we are going to take a look at where Micron Technology, Inc. (NASDAQ:MU) stands against the other semiconductor stocks.
The semiconductor industry has always been a battleground for technological development, though lately, it has turned into a full-scale battle. The US and China are not only vying to outpace each other in the race to achieve AI superiority but are also actively trying to slow each other down.
The US for instance has placed a number of export restrictions on global firms selling semiconductor technologies to China. Many leading US companies have had to deal with declining China sales as a result of these restrictions. On the other hand, China is trying its best to come up with technologies that compete with those in the US, despite restrictions.
The emergence of DeepSeek AI at the end of January was a wake-up call for the Americans, with China building its latest AI model for a fraction of the cost that the US counterparts spend on their models. While the validity of these claims is debatable, it does show how far China has come when it comes to competing with the US.
As a result of the DeepSeek AI announcement, many semiconductor stocks took a big hit. Two weeks later, some of the stocks started recovering and investors started feeling comfortable with the thought of continued technological dominance by the US. We therefore decided to look at the semi-stocks that were making a comeback from the DeepSeek dip.
To come up with the list of 15 semiconductor stocks making a comeback from DeepSeek AI dip, we only considered stocks with a market cap of at least $10 billion that beat the S&P 500 in the last 5 days of trading.
A close-up view of a computer motherboard with integrated semiconductor chips.
Micron Technology, Inc. (NASDAQ:MU)
Micron Technology, Inc. (NASDAQ:MU) is a developer, designer, manufacturer, and supplier of storage and memory products. It operates in the Storage Business Unit, Mobile Business Unit, Compute and Networking Business Unit, and Embedded Business Unit. The company sells its products through distributors, direct sales forces, retailers, and independent sales representatives. The stock is up 6.78% in the last week against the S&P 500’s 1.13% gains and is on course to be an outperformer this year, especially in the second half.
Micron Technology, Inc. (NASDAQ:MU) stock was hammered after the company gave poor guidance for the fiscal second quarter in December. The stock has been volatile since and has provided a couple of buying opportunities as well. As the Q2 earnings approach, the stock is slowly inching back to its December highs, and for good reason.
In the second half of the fiscal year (March onwards), the company is expected to enjoy strong demand for DRAM. The NAND oversupply is also set to diminish, which should help the company’s topline. These normalizing inventory levels have come just in time as the demand for Micron’s memory products in PCs and smartphones is expected to pick up.
On the flip side, with the demand picking up in low-margin products, the company expects its gross margins to go down sequentially. Due to the NAND oversupply, the manufacturing facility is also not operating at optimal levels, further eating into the margins. As AI spending continues unabated, Micron should keep enjoying strong demand for its DRAM products, helping it survive the downturns of the cyclical industry.
Overall MU ranks 7th on our list of the semiconductor stocks that are making impressive comeback from DeepSeek AI Dip. While we acknowledge the potential of MU as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as 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 was originally published at Insider Monkey.