Two Tech Stocks You Should Buy Right Now

Nvidia is everyone's favorite AI stock, but there are alternative AI bets. Intel and Micron Technology are growing as the semiconductor sector recovers after a few years of decline. Top semiconductor stocks have reached new highs this year, but their valuations still have space for growth.  

1. Intel Intel has entered unknown territory in recent years. Advanced Micro Devices has lost market share in the chip business and in the data center as companies use more powerful GPUs to train AI models. Intel fights back. The stock has risen due to improving financial performance, but it has more room to run in the coming years.  

Intel is happy with the semiconductor industry's resurgence because its chips are in over 60% of computers. In Q4 2023, Intel's sales rose 10% and should continue to expand as the PC market recovers. Q4 revenue for Intel's client computing group rose 33%. This growth followed the launch of Intel Core Ultra mobile processors, which power new AI experiences for PC users.  

AI PCs have great growth potential. Microsoft's Copilot generative AI assistant has been released for commercial users, and a wider distribution to consumers might boost Intel's client computing group.  

Intel predicts 80% of PCs will be AI-based by 2028. Its recent success with Core Ultra shows it can maintain its CPU market lead and generate billions of dollars if that estimate continues. Intel is expected to earn $2.96 per share by 2026, according to Wall Street. At a market average price-to-earnings (P/E) ratio of 25, the company could be worth $74, up 68%. That should beat the S&P 500.  

2. Micron Tech AI training needs more than powerful processors. Companies are investing more in high-bandwidth memory and solid-state storage to manage huge data workloads. Micron Technology is well-positioned for growth.  

Micron's sales rose 23% last quarter, and that's just the start. After a fall last year, revenue is rising ahead of a multiyear AI market opportunity, according to management. Micron's high-bandwidth memory is sold out for 2024 and most of 2025.  

As a top provider of computer DRAM modules, the company should benefit from AI-based PCs. Management anticipates AI-based phones would need more memory per unit, a driver. Memory prices should rise this year, resulting in record fiscal 2025 revenue, according to the executive team.  

In the next five years, Wall Street expects Micron's EPS to reach $10.05. Based on Micron's average P/E of 23, the stock might reach $230 by 2026. That's roughly 80% above the share price, enough to beat the S&P 500's average yearly return.  

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