Granted, the stock is up 200% in the past 12 months, so you can understand why GS analysts are inclined to look a bit skeptically at a more extended run.
But the thing they don’t take into account is the fact that we are at the point of inflection with new technologies that are going to require faster and better memory than ever before.
The best analogy is to Nvidia Corporation (NASDAQ:NVDA). This was just a company that made high-end graphics cards for computers. Nothing too special and it had huge competitors like Intel Corporation (NASDAQ:INTC) and Advanced Micro Devices, Inc. (NASDAQ:AMD) on a low-margin product.
But then came advances in technologies like virtual reality, Big Data, cloud computing, the Internet of Things, smart and driverless cars. All of a sudden, NVDA was in huge demand and the stock continues to soar.
That is very similar to what is now happening in memory. For all these new technologies to work and continue to evolve, memory needs to be more dynamic and accessed in near real time. Artificial intelligence is a good example.
Store images need to be referenced, analyzed, categorized and a decision needs to be made while a car is in motion. Mechanical memory is not sufficient. GS is looking at a model that isn’t taking into account the significance of this shift.
And it’s going to be focused players like MU that will win the biggest in coming years. But you don’t have to wait that long. It’s already happening.
MU Stock Is on Fire
In late March, Micron announced its Q2 earnings. Revenues were 58% higher than they were compared to the same quarter a year ago and 17% higher in sequential quarters. Gross margins nearly doubled compared to the same quarter last year.
These aren’t the numbers of company that is fading into a new leg of the tech revolution. These numbers are growing because MU stock is on top of its industry.
As more companies demand better, faster memory, they will need a big company to be able to supply them with the speed and quality they demand. MU stock fits the bill.
As for the various competition, it doesn’t have the size or scope or focus that MU has built over the past 40 years.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.