After defying a market sell-off Wednesday and rising, Micron (MU +8.80%) stock raced ahead another 7.7% through 10:40 a.m. ET Thursday after President Trump announced he has arranged a partnership between Apple (AAPL +0.86%) and Intel (INTC +10.75%), whereby Intel will manufacture semiconductor chips for Apple.
Apple stock is gaining more than 1% on the news, and Intel’s up more than 7%.
And investors seem to think this is great news for Micron stock, too.
Image source: Micron.
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Apple will design the new chips, and Intel will manufacture them at factories in the United States, the President announced on Truth Social, reversing decades of policies that encouraged the offshoring of semiconductor production and returning more manufacturing activity to the U.S.
Combined with already announced projects that will see Intel collaborate with SpaceX (SPCX 3.44%) and Tesla (TSLA +1.18%) to manufacture AI chips and other semiconductors at the Terrafab megafactory, this latest project promises to kick-start a boom in domestic semiconductor manufacturing, reshoring capacity that had previously been offshored.
It could also prove a boon for Micron stock.
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What this means for Micron
Blue sky dreams of limitless semiconductor sales to drive the AI revolution have already added 475% to Intel’s stock price over the past 52 weeks. And because investors see Micron as an integral part of this revolution — its memory chips being essential to helping AI chips perform inference functions and answer questions posed to AI — Micron stock has done even better, soaring 744%.
Granted, the stock looks a little pricey at nearly 50 times trailing earnings today. But because Micron’s profits are growing rapidly, the stock trades for a forward P/E of less than 10. Micron shouldn’t have to grow very fast to justify that valuation.
Thanks to Intel, Micron may grow very fast indeed.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Intel, Micron Technology, and Tesla. The Motley Fool has a disclosure policy.
