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Missed the boom in NVDA, SMCI, AMD? Here’s the next big AI chip stock

Missed the Boom in NVDA, SMCI, AMD? Here's the Next Big AI Chip stock
Elmaz Sabovic

In what seems like an artificial intelligence revolution, semiconductor stocks focused on AI, such as Nvidia (NASDAQ: NVDA) and Advanced Micro Devices (NASDAQ: AMD), have experienced significant value surges. 
Alongside them, other AI-related stocks like Super Micro Computer (NASDAQ: SMCI) have also reaped the benefits of this surge over the last year.

SMCI, NVDA, and AMD stock 1-year gains. Source: Google Finance
SMCI, NVDA, and AMD stock 1-year gains. Source: Google Finance

For investors who may have missed out on these gains, there could be a chance to capitalize on a late opportunity with Micron Technology (NASDAQ: MU) stock, which thanks to its price and potential still offers a profitable entry point for investors.

MU stock YTD price chart. Source: Finbold
MU stock YTD price chart. Source: Finbold

Analyst sees MU stock as next big gainer

The rise of AI-related stocks has sparked speculation about which company could be the next big mover. Analysts at Lynx equity strategists suggest that Micron Technology might be the next standout player in this arena, agreeing with optimistic predictions from colleagues that went as high as $150, with an average target set at $119, which is a 22.36% increase from current price levels.

Lynx believes that Micron’s earnings report will underscore the crucial role of flash storage in the ongoing AI revolution. They note a significant increase in demand for flash storage from AI data centers, which they expect to positively impact Micron’s NAND business and Memory Fabrication utilization.

The firm contends that the market has yet to fully grasp the importance of flash storage in AI data lake creation and training. They anticipate that if Micron’s NAND business becomes central to AI applications, the company could be perceived less as a cyclical commodity player and more as a secular pure play in AI.

Monster earnings beat in line with analyst expectations for MU stock

Micron’s stock surged over 16% in after-hours trading following the release of their second-quarter fiscal 2024 results, which exceeded analysts’ expectations and included optimistic guidance. 

MU stock pre-market quotes. Source: Nasdaq
MU stock pre-market quotes. Source: Nasdaq

Specializing in computer memory and storage, Micron attributed its success to the ongoing artificial intelligence boom. 

Revenue also outperformed expectations, coming in at $5.82 billion compared to the anticipated $5.35 billion. Micron’s revenue saw a significant increase from $3.69 billion in the same quarter last year, with a net income of $793 million, marking a substantial improvement from the $2.3 billion net loss reported in the previous year’s corresponding period. 

Q2 financials for Micron Technology. Source: Micron Technology
Q2 financials for Micron Technology. Source: Micron Technology

Looking ahead to the fiscal third quarter, Micron anticipates reporting revenue of $6.6 billion, exceeding analysts’ expectations of $6.02 billion.

Q3 guidance for Micron Technology. Source: Micron Technology
Q3 guidance for Micron Technology. Source: Micron Technology

Micron’s impressive financial results have surpassed even the optimistic expectations of analysts, indicating a promising trajectory for the company in future quarters. This positive performance is expected to further strengthen Micronc stock moving forward.

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