We recently published a list of 10 Most Undervalued S&P 500 Stocks to Buy Now. In this article, we are going to take a look at where Micron Technology, Inc. (NASDAQ:MU) stands against other undervalued S&P 500 stocks to buy now.

Earlier on March 13, Michael Cuggino, President and Portfolio Manager of the Permanent Portfolio Family of Funds, appeared on CNBC’s ‘The Exchange’ and began discussing his fund’s performance. Despite a challenging market environment, his fund achieved a 4% return this year, which he attributed to diversification rather than reliance on a single asset class like gold. The portfolio includes gold, silver, diversified equities, and bonds. When asked about market reactions to tariff-related headlines, Cuggino emphasized the importance of not overreacting to daily news fluctuations. He described the market’s behavior as herky-jerky and advised investors to focus on long-term opportunities rather than reacting impulsively. His base case anticipated some turbulence due to the transition under the new administration’s economic policies. His strategy involves identifying opportunities during volatile periods rather than making significant portfolio changes.

The discussion also featured David Zervos, Chief Market Strategist at Jefferies, who provided insights on Washington’s role in market volatility. Zervos acknowledged that while policies such as tariffs, immigration reforms, and drug policies were largely unfolding as expected, the speed of changes under the current administration was surprising investors. He pointed out rapid spending cuts and layoffs in the public sector as key contributors to market unease. For instance, courts recently ordered the federal government to rehire probationary employees who had been dismissed. Zervos likened this abrupt shift to transitioning from a public-sector-reliant economy to one driven by the private sector, which is a process that has introduced significant uncertainty. Regarding tariffs specifically, Zervos downplayed their overall impact on the US economy, which he described as domestically driven. While tariffs could affect specific industries like wine or automobiles with high overseas components, he argued that broader economic trends would be shaped by deregulation, reduced business costs, and a shift toward private-sector efficiency. He warned that the speed of these transitions could lead to short-term volatility but maintained optimism about long-term productivity gains.

Methodology

We used the Finviz stock screener to compile a list of the top S&P 500 stocks that had a forward P/E ratio under 15. We then selected the 10 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 1000 elite money managers.

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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

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Micron Technology, Inc. (NASDAQ:MU)

Forward P/E Ratio as of March 14: 13.28

Number of Hedge Fund Holders: 94

Micron Technology, Inc. (NASDAQ:MU) is a memory and storage solutions company that designs, develops, and manufactures DRAM, NAND, and NOR memory technologies under Micron and Crucial brands. It serves critical applications in data centers, mobile devices, automotive, and industrial sectors.

As January concluded, Morgan Stanley analyst Joseph Moore revised the company’s price target and lowered it from $98 to $91, while maintaining an Equal Weight rating. This reflected concerns regarding DeepSeek’s AI advancements that could lead to deflationary pressures. Moore suggested that the market’s response might trigger increased export restrictions or a decline in spending within the semiconductor industry, although it’s unexpected. However, he remains optimistic about the sector’s overall prospects.

The company’s data center segment contributes over 50% of its revenue as of FQ1 2025.  It’s invested in the AI memory market, with HBM as a focus. The HBM market is projected to surpass $30 billion in 2025. The company is transitioning to 12-high HBM production, which will boost revenue throughout 2025. Micron Technology Inc. (NASDAQ:MU) is a frontrunner in deploying LPDDR5X memory in data centers for AI workloads. It’s partnering with players like NVIDIA, that use LPDDR5X’s performance and efficiency advantages.

Parnassus Value Equity Fund stated the following regarding Micron Technology, Inc. (NASDAQ:MU) in its Q2 2024 investor letter:

“Micron Technology, Inc. (NASDAQ:MU) posted fiscal-third-quarter results that met expectations. Micron’s DRAM (dynamic random access memory) and NAND (non-volatile storage technology) segments grew revenue strongly, continuing the company’s recovery from a cyclical downturn last year. We believe Micron is well positioned to capitalize on AI-driven demand for greater memory.”

Overall, MU ranks 7th on our list of the most undervalued S&P 500 stocks to buy now. While we acknowledge the growth potential of MU as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MU but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires

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