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Why Micron (MU) May Be a Good Bet Amid Highly Volatile Market
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Micron Technology (MU - Free Report) is one such stock that investors should consider adding to their portfolio to shrug off the current highly volatile market environment and make some gains from the upside potential.
Wall Street has been witnessing high volatility since the beginning of 2022 due to multiple factors, including the pandemic, rising inflationary concerns, increasing crude oil prices and a shift in Fed’s policy to a tougher-than-expected line. Moreover, escalating tensions between Russia and Ukraine have further enhanced this volatility over the past week.
The aforementioned global macroeconomic and geopolitical uncertainties are likely to continue weighing on investors’ sentiments, which could result in more volatility in the U.S. equity market. Year to date, the Dow Jones Industrial Average, Nasdaq Composite and S&P 500 have plunged 9.7%, 18% and 11.9%, respectively.
In such a scenario, growth-rated stocks, such as Micron, can boost one’s portfolio.
Why Should One Bet on Micron?
Amid the ongoing economic and financial instability, it is prudent to pick solid growth companies as these are financially stable, accruing profits in established markets. These stocks, with their solid fundamentals, allow investors to hedge their funds from any economic downturn.
Apart from having solid fundamentals, MU has the favorable combination of a Growth Score of A and a Zacks Rank #2 (Buy).
Per Zacks’ proprietary methodology, stocks with a combination of a Zacks Rank #1 (Strong Buy) or #2 and a Growth Score of A or B offer solid investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.
Additionally, Micron has impressive growth expectations. The long-term earnings per share growth rate is estimated at 24.2%.
The Zacks Consensus Estimate of $8.95 per share for fiscal 2022 earnings suggests growth of approximately 47.7% from the year-ago period. For fiscal 2023, the consensus mark for earnings is pegged at $11.02, indicating a year-over-year increase of 23.2%.
Micron has an impressive earnings surprise history. The company outpaced estimates in all the trailing four quarters, delivering an average earnings surprise of 5%.
Analysts have raised estimates for fiscal 2022 and fiscal 2023 over the past 30 days, reflecting their confidence in the company. During the same period, the Zacks Consensus Estimate for fiscal 2022 and 2023 earnings has moved north by 4 cents and 14 cents, respectively.
Micron is the only U.S.-based semiconductor company, which produces both types of key memory chips, i.e., DRAM and NAND. The usage of memory chips has been rapidly growing and now constitutes about 30% of the total global semiconductor market, up from about 10% a decade ago.
The demand for memory chips has been growing rapidly, mainly driven by its increasing usage across everything, from smartphones to the artificial-enabled cloud.
Memory chips have become one of the most important components of the current-day technology-driven economy. Digitization across industries, the adoption of cloud computing, as well as the integration of AI and machine learning, are fueling demand for memory chips.
The accelerated deployment of 5G technology — the next-generation wireless revolution — is likely to propel further growth. Apart from this, the Internet of things, autonomous vehicles, augmented reality/virtual reality and wearables are other growth prospects.
Other Stocks to Consider
Some other stocks from the semiconductor industry that have the favorable combination of a Zacks Rank and a Growth Score include Advanced Micro Devices (AMD - Free Report) , NVIDIA Corporation (NVDA - Free Report) and ON Semiconductor (ON - Free Report) .
Advanced Micro Devices currently sports a Zacks Rank #1 and has a Growth Score of B. The Zacks Consensus Estimate for first-quarter 2022 earnings has been revised upward by 33.8% to 91 cents per share over the past 60 days. For 2022, earnings estimates have moved upward by 2 cents to $3.99 per share over the past 30 days.
Advanced Micro Devices’ earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 17%. Shares of AMD have rallied 31.1% in the trailing 12 months.
NVIDIA currently sports a Zacks Rank #1 and has a Growth Score of B. The Zacks Consensus Estimate for first-quarter fiscal 2023 earnings has been revised upward by 11 cents to $1.30 per share over the past 30 days. For fiscal 2023, earnings estimates have moved upward 7.8% to $5.56 per share in the past 30 days.
NVIDIA’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 7%. NVDA stock has rallied 70.6% over the past year.
ON Semiconductor sports a Zacks Rank #1 and has a Growth Score of A at present. The Zacks Consensus Estimate for ON’s first-quarter 2022 earnings has been revised upward to $1.04 per share from 82 cents 30 days ago. For 2022, earnings estimates have been revised upward by 26.8% to $4.16 per share in the past 30 days.
ON Semiconductor’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 16.3%. Shares of ON have increased 41.1% over the past year.
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Why Micron (MU) May Be a Good Bet Amid Highly Volatile Market
Micron Technology (MU - Free Report) is one such stock that investors should consider adding to their portfolio to shrug off the current highly volatile market environment and make some gains from the upside potential.
Wall Street has been witnessing high volatility since the beginning of 2022 due to multiple factors, including the pandemic, rising inflationary concerns, increasing crude oil prices and a shift in Fed’s policy to a tougher-than-expected line. Moreover, escalating tensions between Russia and Ukraine have further enhanced this volatility over the past week.
The aforementioned global macroeconomic and geopolitical uncertainties are likely to continue weighing on investors’ sentiments, which could result in more volatility in the U.S. equity market. Year to date, the Dow Jones Industrial Average, Nasdaq Composite and S&P 500 have plunged 9.7%, 18% and 11.9%, respectively.
In such a scenario, growth-rated stocks, such as Micron, can boost one’s portfolio.
Why Should One Bet on Micron?
Amid the ongoing economic and financial instability, it is prudent to pick solid growth companies as these are financially stable, accruing profits in established markets. These stocks, with their solid fundamentals, allow investors to hedge their funds from any economic downturn.
Apart from having solid fundamentals, MU has the favorable combination of a Growth Score of A and a Zacks Rank #2 (Buy).
Per Zacks’ proprietary methodology, stocks with a combination of a Zacks Rank #1 (Strong Buy) or #2 and a Growth Score of A or B offer solid investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.
Additionally, Micron has impressive growth expectations. The long-term earnings per share growth rate is estimated at 24.2%.
The Zacks Consensus Estimate of $8.95 per share for fiscal 2022 earnings suggests growth of approximately 47.7% from the year-ago period. For fiscal 2023, the consensus mark for earnings is pegged at $11.02, indicating a year-over-year increase of 23.2%.
Micron has an impressive earnings surprise history. The company outpaced estimates in all the trailing four quarters, delivering an average earnings surprise of 5%.
Analysts have raised estimates for fiscal 2022 and fiscal 2023 over the past 30 days, reflecting their confidence in the company. During the same period, the Zacks Consensus Estimate for fiscal 2022 and 2023 earnings has moved north by 4 cents and 14 cents, respectively.
Micron Technology, Inc. Price and Consensus
Micron Technology, Inc. price-consensus-chart | Micron Technology, Inc. Quote
Growing Demand for Memory Chips to Aid Micron
Micron is the only U.S.-based semiconductor company, which produces both types of key memory chips, i.e., DRAM and NAND. The usage of memory chips has been rapidly growing and now constitutes about 30% of the total global semiconductor market, up from about 10% a decade ago.
The demand for memory chips has been growing rapidly, mainly driven by its increasing usage across everything, from smartphones to the artificial-enabled cloud.
Memory chips have become one of the most important components of the current-day technology-driven economy. Digitization across industries, the adoption of cloud computing, as well as the integration of AI and machine learning, are fueling demand for memory chips.
The accelerated deployment of 5G technology — the next-generation wireless revolution — is likely to propel further growth. Apart from this, the Internet of things, autonomous vehicles, augmented reality/virtual reality and wearables are other growth prospects.
Other Stocks to Consider
Some other stocks from the semiconductor industry that have the favorable combination of a Zacks Rank and a Growth Score include Advanced Micro Devices (AMD - Free Report) , NVIDIA Corporation (NVDA - Free Report) and ON Semiconductor (ON - Free Report) .
Advanced Micro Devices currently sports a Zacks Rank #1 and has a Growth Score of B. The Zacks Consensus Estimate for first-quarter 2022 earnings has been revised upward by 33.8% to 91 cents per share over the past 60 days. For 2022, earnings estimates have moved upward by 2 cents to $3.99 per share over the past 30 days.
Advanced Micro Devices’ earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 17%. Shares of AMD have rallied 31.1% in the trailing 12 months.
NVIDIA currently sports a Zacks Rank #1 and has a Growth Score of B. The Zacks Consensus Estimate for first-quarter fiscal 2023 earnings has been revised upward by 11 cents to $1.30 per share over the past 30 days. For fiscal 2023, earnings estimates have moved upward 7.8% to $5.56 per share in the past 30 days.
NVIDIA’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 7%. NVDA stock has rallied 70.6% over the past year.
ON Semiconductor sports a Zacks Rank #1 and has a Growth Score of A at present. The Zacks Consensus Estimate for ON’s first-quarter 2022 earnings has been revised upward to $1.04 per share from 82 cents 30 days ago. For 2022, earnings estimates have been revised upward by 26.8% to $4.16 per share in the past 30 days.
ON Semiconductor’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 16.3%. Shares of ON have increased 41.1% over the past year.