Some companies are starting to struggle right now amid the costs of rising interest rates. Other companies are faring much better, as there are strong long-term trends behind them that can help them move forward in time.
Even though some companies are warning on short-term pain, those who see big potential moves ahead could still deliver great returns for patient investors amid this latest market selloff.
For instance, chipmaker Micron (MU) is reporting that business is in a slump. And that their next earnings report will be terrible.
Yet the company’s memory chips can give it a profitable niche in the AI space in the years ahead. And it has a relatively strong balance sheet loaded with over $10 billion in cash.
That’s likely why shares have outperformed in the past year, up 33 percent. And why the stock’s uptrend is still intact, even amid this latest market drop.
Action to take: Investors should look to pick up Micron at prices near where shares trade today, and to add more on a dip, as a long-term investment play. Micron also pays a 0.7 percent yield at current prices.
For traders, expect the long-term uptrend to continue in the coming months. The January 2024 $75 calls, last going for about $3.00, could see mid-to-high double-digit returns in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.