The lucrative cloud computing sector and other areas where Microsoft has been integrating AI for a long time explain why experts expect the company's top and bottom lines to grow. AI may improve Microsoft's revenue by $82.5 billion and earnings by $5.10 per share by 2028, according to Evercore.
Given that Microsoft is expected to make $11.66 per share on $244.3 billion in revenue this fiscal year, that should enhance earnings. Investors should buy this tech behemoth before it soars higher and gets costly due to the increased demand for AI applications across many industries.
2. Micron Tech After two years of decline, the memory market recovered in 2023. From 2021 to 2023, DRAM chip prices plummeted, devastating Micron's top and bottom lines.
DRAM prices are predicted to rise 10%–15% in the first quarter of 2024, which is beneficial for Micron. It's not unexpected that AI is being used in personal computers, cellphones, and servers, which drove the price increase.
Major chipmakers employ high-bandwidth memory in AI accelerators, therefore AI servers require more of it. AI-enabled PCs and smartphones should boost memory chip demand.
This explains why Gartner expects the memory market's revenue to rise 88% to $87 billion this year due to improved pricing and volumes. Storage memory revenue is expected to reach $53 billion in 2024, up approximately 50%.
According to consensus projections, Micron's sales will rise 46% to $22.7 billion in the current fiscal year due to the memory market's rebound. The momentum should continue in the following two fiscal years, analysts say.
Micron stock trades at 6.6 times sales. This semiconductor stock's price-to-sales ratio is lower than the Nasdaq-100's 7.3, suggesting investors are getting a decent deal. Micron may have a $212 billion market cap with a sales multiple of even 6 after two fiscal years. That's almost quadruple its $107 billion market worth, so investors should buy this Nasdaq company before it soars.
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