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Micron stock jumps for second day after Nvidia mention boosts semiconductor sector hopes again today

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Nvidia’s Use of Micron’s Chips Boosts Shares

Micron Technologies (MU) stock has been on an upward trajectory for the second consecutive day, with shares climbing 6% today after advancing 10.5% yesterday. The surge in MU’s stock price can be attributed to a statement made by Nvidia (NVDA) CEO Jensen Huang during his recent announcement regarding the company’s new GeForce RTX 50 Blackwell gaming chips.

Nvidia’s Adoption of Micron’s High-Bandwidth-Memory (HBM) Chips

According to Jensen Huang, Micron’s high-bandwidth-memory (HBM) chips will be used in Nvidia’s new GeForce RTX 50 Blackwell gaming chips. HBM has been a key growth driver for Micron, and the company’s Chief Business Officer, Sumit Sadana, highlighted its importance during the company’s fiscal first-quarter earnings call held on Dec. 18.

HBM: A Key Growth Engine for Micron

During the earnings call, Sumit Sadana noted that HBM, combined with solid-state drive (SSD) chips, had enabled the company’s revenue from data centers to soar 400% versus the same period a year earlier during the quarter. Additionally, Sadana stated that HBM had become a multiple billion-dollar business and that more than half of the company’s revenue was being generated by data centers.

Foxconn’s Strong Results and Micron’s Presence on Evercore’s List

The positive sentiment surrounding MU stock yesterday may also have been influenced by Foxconn’s slightly stronger-than-expected Q4 results. As the largest manufacturer of Apple (AAPL) iPhones, Taiwan-based Foxconn reported Q4 sales of 2.13 trillion New Taiwan dollars or $65 billion. Analysts had expected the company’s revenue to come in at 2.1 trillion New Taiwan dollars, according to an average compiled by LSEG SmartEstimate.

Micron sells chips to Apple, which may have contributed to the company’s inclusion on a list of stocks called "AI Enablers, Adopters and Adapters." Compiled by investment bank Evercore ISI, this list includes members of the Russell 3000 index whose market caps are above $3 billion and whose previous earnings calls include more references to AI than average for Russell 2000 members in the previous four quarters.

Evercore’s List: AI Stocks with Potential

The stocks on this list had to have had a positive reaction to their earnings, while their forward price-to-earnings (P/E) ratios trade below their five-year average. Evercore ISI predicts that the earnings per share of all the names on the list will increase by at least 9.6%.

MU’s Potential and Limitations

While we acknowledge the potential of MU stock, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns within a shorter time frame.

Top AI Stocks to Consider

If you are looking for an AI stock that is more promising than MU but trades at less than 5 times its earnings, check out our report on the cheapest AI stock.

Cheapest AI Stock

Our research suggests that there are several AI stocks that may be more attractive than MU in terms of potential returns and growth prospects. While we cannot predict with certainty which stocks will perform well in the future, we can provide you with a list of top AI stocks to consider.

Key Takeaways

Micron’s high-bandwidth-memory (HBM) chips have been a key growth driver for the company.
Nvidia’s adoption of HBM chips in its new GeForce RTX 50 Blackwell gaming chips has boosted MU stock.
Foxconn’s strong Q4 results may also have contributed to the positive sentiment surrounding MU stock.
Evercore’s list of AI stocks includes companies with potential for growth and increased earnings per share.