The stock market’s return has been massively influenced by the returns in Nvidia (NVDA). The designer of GPUs and other hardware has surged thanks to an interest in AI. But with the share split over, the stock price may slow its gains from here.
That will allow other chipmakers also seeing a big boost in business right now to see massive returns in their share price. A few could even outperform Nvidia in the second half of the year.
One contender is memory chip manufacturer Micron (MU).
While shares are already up 130% over the past year, the stock trades at just 10 times earnings. So it’s no surprise that shares continue to trend higher into its next report.
Revenues are up 57% over the past year, but Micron still needs to improve its earnings growth to truly take off. That can potentially happen over the next few quarters.
Action to take: Investors may want to buy a partial stake now, and use any pullback in shares to add to that stake.
Micron also pays a dividend, although the yield is slightly low at 0.3%.
For traders, the uptrend in Micron shares looks likely to continue. The September $185 calls, last trading for about $7.65, could see mid-to-high double-digit returns in the months ahead
Disclosure: The author of this article has a position in the company mentioned here, but does not intend to further trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.