2 Popular AI Stocks to Sell Before They Drop 44% and 60%, According to Wall Street
Written by Trevor Jennewine for The Motley Fool -> Semiconductor companies Micron and Intel have a large opportunity in growing demand for artificial intelligence. Micron is losing market share in DRAM and NAND memory chips despite reporting strong financial results. Intel is
Semiconductor companies Micron and Intel have a large opportunity in growing demand for artificial intelligence.
Micron is losing market share in DRAM and NAND memory chips despite reporting strong financial results.
Intel is losing market share in data center and client CPUs, and its nascent foundry business is burning cash.
Micron Technology (NASDAQ: MU) and Intel (NASDAQ: INTC) are popular with investors right now because the artificial intelligence (AI) boom represents a significant growth opportunity for both companies. The stocks have added 228% and 192%, respectively, this year. Yet, certain Wall Street analysts think Micron and Intel are wildly overvalued.
Those forecasts suggest investors should sell Micron and Intel. Here's why I agree.
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Micron manufactures memory and data storage solutions built on DRAM and NAND flash technology. Its products are used in data centers, mobile devices, personal computers, and automotive systems. While Micron has benefited from a severe memory chip supply shortage tied to demand for artificial intelligence , it lacks a durable competitive advantage.
"We do not believe Micron has an economic moat ," writes Kerwin at Morningstar, mentioning the capital-intensive nature of the memory chip industry and the company's mediocre profit margins. "We view DRAM and NAND as commodity-like products prone to market supply/demand dynamics and steady pricing erosion."
