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Micron Technology Inc (NASDAQ:MU): The Best Undervalued AI Stock to Buy for Long-Term Investors?

We recently published a list of the Forget Magnificent 7: Analysts are Talking About ‘Big 10’ AI Stocks in 2024Since Micron Technology Inc (NASDAQ:MU) ranks 8th in the list, it deserves a deeper look.

When the AI revolution started with the launch of ChatGPT, investors started pouring money into a handful of companies that are leading AI technology development, thanks to their industry position and unending free cash flows. Market analysts soon started pointing to the concentration of gains phenomena in the market, where just a few stocks accounted for most of the broader market gains. This tech concentration remains strong as of today, as all important AI and Cloud technologies that we see in the news are developed, acquired or marketed by mega-cap tech companies we’re all familiar with. Bank of America analyst Michael Hartnett recently said in a report that the S&P 500 has gained about 12% so far in the year, but if we remove 10 technology companies from the equation, these gains shrink to just 3.6%. Hartnett calls these companies the “AI Big Ten” group.

What about the Magnificent Seven group of stocks that kept making headlines in 2023 and early 2024? Hartnett calculated that the broader market gained just 4.9% so far this year if these seven stocks are taken out of the equation. There is a third group of stocks that most investors are unaware of: Hedge Fund Top 30. These 30 stocks include the Magnificent Seven as well as 23 other promising stocks. These 30 stocks returned 53.2% in 2023, 20.2% during the first 5 months of 2024 vs. 11% for the S&P’s large cap index. You can check out the latest list here: 31 Most Popular Stocks Among Hedge Funds.

In this article we will take a look at the Big 10 AI stocks Bank of America analyst Michael Hartnett highlighted in his report. With each stock we have mentioned the number of hedge fund investors, as of the end of the March quarter. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

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Micron Technology Inc (NASDAQ:MU)

Number of Hedge Fund Investors: 115

Wall Street is taking notice of Micron Technology Inc’s (NASDAQ:MU) ascendance in the AI industry dominance hierarchy. BofA thinks Micron Technology Inc (NASDAQ:MU) is one of the Big 10 AI stocks in 2024, having gained about a massive 62% so far this year.

UBS recently maintained a Buy rating on Micron Technology Inc (NASDA:MU) and increased its price target on the stock to $155 from $125, citing its industry checks pointing to higher prices in the DRAM and NAND memory industry. UBS said that Micron Technology Inc’s (NASDA:MU) valuation could become attractive once its gross margin peaks in the fourth quarter of 2025 . UBS expects Micron Technology Inc’s (NASDA:MU) EPS in 2025 to come in at around $17.50.

During the fiscal second quarter, out of its four segments, three segments saw a 50% growth on a YoY basis. At the consolidated level, Micron Technology Inc (NASDA:MU) saw a 58% YoY revenue growth.  During fiscal Q3, Micron Technology Inc (NASDA:MU) expects revenue growth to increase to 76%.  Analysts believe Micron Technology Inc (NASDA:MU) is expected to keep growing faster amid a rising demand for its chips that power Cloud and AI servers. Micron HBM3E, one of Micron Technology Inc’s (NASDA:MU) most famous AI chips, has already sold out for 2024 and most of 2025.

According to data compiled by Yahoo Finance, Wall Street expects Micron Technology Inc’s (NASDA:MU) revenue growth to total 44% in 2025, while earnings growth is expected at 750% in the next year. The stock’s forward P/E ratio is 18, which is justified if Micron Technology Inc (NASDA:MU) is able to see sustained growth in the months to come.

Sequoia Fund stated the following regarding Micron Technology, Inc. (NASDAQ:MU) in its fourth quarter 2023 investor letter:

“Exits last year included Netflix, Bank of America and Micron Technology, Inc. (NASDAQ:MU). As discussed in our Q2 shareholder letter, we exited Micron after the rationale for our investment was strained by rising geopolitical tensions, which have increased investment risks in the high-performance semiconductor industry. These risks are bearable, but we felt it prudent to reduce the portfolio’s exposure to them. We think both Bank of America and Micron were purchased at conservative prices given the facts at hand, but the facts changed and we moved on.”

Overall, Micron Technology Inc (NASDAQ:MU) ranks 8th on Insider Monkey’s list titled Forget Magnificent 7: Analysts are Talking About ‘Big 10’ AI Stocks in 2024. While we acknowledge the potential of Micron Technology Inc (NASDAQ:MU), our conviction lies in the belief that 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 more promising than Micron Technology Inc (NASDAQ:MU) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: Analyst Sees a New $25 Billion “Opportunity” for NVIDIA and Jim Cramer is Recommending These 10 Stocks in June.

Disclosure: None. This article is originally published at Insider Monkey.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

Dr. Inan Dogan

Dr. Ian Dogan

Co-Founder and Research Director at Insider Monkey

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.

What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.

In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

This prediction might not be bold at all:

A few years from now, you’ll wish you’d owned this stock.

The best part? You can discover everything about this company and its groundbreaking technology right now.

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Wall Street calls this $3 stock a “Melting Ice Cube.” They said the same thing about BTI before it returned 90%.

Dr. Inan Dogan

Dr. Ian Dogan

Co-Founder and Research Director at Insider Monkey

My name is Inan Dogan. I’m the co-founder and Research Director of Insider Monkey. I have an important message for you today.

Since March 2017, my stock picks have returned 16.5% annually. Today, I’ve found an opportunity even bigger than my British American Tobacco call.

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We looked under the cover and realized they were wrong.

We alerted our subscribers, and BTI returned 90% in just 16 months.

Now if you had invested just $10,000 in BTI in June 2024, you’d be sitting on $19,000 in October 2025.

Today, we have identified a nearly identical pattern in a digital-first giant trading at $3.

While the market panics over a surface-level revenue decline, our PhD-led research shows management has actually surgically cut $100 million in waste to focus on high-margin growth.

This pattern is a hallmark of our 16.5% annual return track record. The current opportunity offers a 400% upside potential—dwarfing even our 90% BTI return.

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