As the bull rally in artificial intelligence-adjacent stocks continues, some overlooked potential beneficiaries of this trend have emerged. According to Aaron Dunn, co-head of value equity at Morgan Stanley Investment Management and a portfolio manager on the Eaton Vance Value team, Micron and Accenture are two stocks worth keeping an eye on. While investors have expressed concerns about high valuations, Dunn believes that both companies represent solid investment opportunities due to their respective businesses and market positions.
Micron, a semiconductor manufacturer, stands to benefit from the increasing demand for memory chips driven by the AI industry. As AI technologies require more memory, the supply of memory chips may struggle to keep up. Micron’s advanced technology and consolidation of the memory business make it well-positioned to capitalize on this demand. The company’s recently launched High Bandwidth Memory wafer, which offers AI capabilities comparable to Nvidia’s graphic processing units while consuming less power, could be a game-changer in the market.
Moreover, Micron could also see gains from the U.S. government’s push for a stronger domestic presence in the semiconductor chip market. Dunn points out that Micron may receive financial incentives to build in-country capacity, further supporting its growth and profitability.
Accenture, on the other hand, is a professional services firm that is capital light and highly profitable. Dunn believes that as more businesses adopt AI technologies and incorporate large language learning models into their operations, there will be a growing need for assistance in understanding and implementing these technologies effectively. Accenture’s expertise positions it well to provide the necessary guidance, making it a potential beneficiary of the AI boom.
While both Micron and Accenture have already shown positive performance this year, with Micron gaining 9% and Accenture adding 7%, Dunn acknowledges the possibility of a modest pullback in Micron’s stock. However, he remains optimistic about the long-term prospects and fundamentals of both companies.
Frequently Asked Questions
1. What is the significance of AI-adjacent stocks in the current market?
AI-adjacent stocks have been the leaders of the current bull rally, indicating the strong investor interest in artificial intelligence and its potential for driving growth and innovation across various industries.
2. What makes Micron and Accenture potential beneficiaries of the AI trend?
Micron is well-positioned to benefit from the increased demand for memory chips driven by AI technologies. Its advanced technology and consolidation of the memory business give it a competitive advantage in the market. Accenture, being a professional services firm, can provide critical guidance to businesses in adopting and implementing AI technologies effectively.
3. How does Micron’s technology differ from Nvidia’s graphic processing units?
Micron’s High Bandwidth Memory wafer offers AI capabilities comparable to Nvidia’s GPUs while requiring less power and operating at higher speeds. This technology advancement positions Micron to capture a share of the AI market.
4. Why might Micron benefit from the U.S. government’s interest in the semiconductor chip market?
The U.S. government’s desire for increased domestic capacity in the semiconductor chip market could financially incentivize Micron to expand its in-country manufacturing, further supporting its growth and profitability.
5. How does Accenture’s expertise make it a potential AI beneficiary?
As businesses increasingly adopt AI technologies, they will require assistance in understanding and implementing these technologies effectively. Accenture’s specialized services and domain knowledge position it to provide valuable guidance, making it a potential beneficiary of the AI trend.
Sources:
Micron: micron.com
Accenture: accenture.com
As the artificial intelligence (AI) industry continues to thrive, there are a few companies that stand out as potential beneficiaries of this trend. Micron, a semiconductor manufacturer, and Accenture, a professional services firm, have caught the attention of investors and industry experts alike. These companies have unique attributes that make them poised to capitalize on the increasing demand for AI technologies.
Micron’s business is centered around semiconductor manufacturing, specifically memory chips. The demand for memory chips has been on the rise due to the growing need for AI technologies, which rely heavily on memory. With AI applications becoming more complex and demanding, the supply of memory chips may struggle to keep up. This presents a significant opportunity for Micron, which has advanced technology and a consolidated position in the memory business. Micron’s recently launched High Bandwidth Memory wafer, which offers AI capabilities comparable to Nvidia’s graphic processing units while consuming less power, could be a game-changer in the market. The company’s focus on innovation and its potential financial incentives from the U.S. government’s interest in the semiconductor chip market further solidify its position as a key player.
Accenture, on the other hand, is uniquely positioned to benefit from the increasing adoption of AI technologies by businesses. As companies strive to incorporate large language learning models and other AI applications into their operations, there is a growing need for guidance and expertise in understanding and implementing these technologies effectively. Accenture’s professional services model, which is capital light and highly profitable, makes it capable of providing the necessary assistance to organizations. Its specialized knowledge and experience in AI and emerging technologies give it a competitive advantage in the market.
While both Micron and Accenture have already shown positive performance this year, it is essential to acknowledge the possibility of a modest pullback in Micron’s stock. However, experts like Aaron Dunn remain optimistic about the long-term prospects and fundamentals of both companies.
In summary, Micron and Accenture are two stocks worth watching in the AI industry. Micron’s advanced technology, consolidation in the memory business, and potential government incentives position it as a strong player in the AI memory chip market. Accenture’s expertise in providing guidance and implementation support for AI technologies make it a potential beneficiary of the growing AI trend. These companies have the potential to see significant growth as the AI market continues to expand.
For more information about Micron, you can visit their website at micron.com. To learn more about Accenture, you can visit accenture.com.
The source of the article is from the blog krama.net