Navellier explains why Micron is better than SpaceX
Micron Technology’s (MU) earnings announcement on June 24 is expected to be the grand finale to a stunning earnings announcement season. For the most recently reported quarter for the three months ended February 26, Micron increased earnings per share by 756% following 984% growth last ...
Navellier explains why Micron is better than SpaceX
Overview
Micron Technology’s (MU) earnings announcement on June 24 is expected to be the grand finale to a stunning earnings announcement season.
For the most recently reported quarter for the three months ended February 26, Micron increased earnings per share by 756% following 984% growth last year.
For the three months ending May, the analyst community is forecasting 276.5% sales growth of $35.02 billion and 949.8% earnings growth of $20.05 per share. In the past month, they have revised its consensus earnings estimate up 4.8%, which is a good sign, since typically positive analyst earnings revisions precede future earnings surprises.
Micron is an outlier, but upcoming second quarter earnings announcements that will commence in July are expected to be outstanding as well.
Just like the previous quarterly earnings announcements, the analyst community has been very busy revising their earnings estimates higher.
Typically, such strong earnings estimates precede future earnings surprises.
Related: Micron gets aggressive stock price target from veteran analyst
Things will likely get bumpy in August, which is a seasonally weak month when Europe and many institutional investors are on vacation.
However, there is no doubt that we are in a FOMO (Fear of Missing Out) environment, so every dip remains a buying opportunity.
In June, the AI correction lasted only four trading days before memory-related stocks like Micron Technology (MU) and Seagate Technology (STX) made new highs.
The lesson investors learned
What does this earnings season teach us amid the largest and most anticipated IPO in history?
Details
That chasing deals often comes at the expense of great returns.
During the recent SpaceX IPO craze, Wall Street resumed chasing some companies without earnings growth.
Case in point, big investors like Ron Baron and Cathie Wood, two of SpaceX’s most prominent and aggressive institutional backers, are doing very poorly this year, since apparently, they missed the AI and data center boom, where the most spectacular earnings have been.
Micron is another case in point. Here’s a stock that many investors had never heard of until recently, that year to date, is up more than 275%.
SpaceX so far? Up about 3%, dashing the hopes of investors clamoring to get in early.
I expect SpaceX (SPCX) shares to settle down due to insider selling as the stock becomes unrestricted in the upcoming months.
SpaceX is not forecasted to be profitable through 2027, since it is hitching its success to the Starship rocket, which is its largest reusable rocket meant to launch heavy payloads, like orbital computing centers.
There was also a lot of insider selling in Rocket Labs (RKLB) before the SpaceX IPO, so there is no hurry to own any space stocks until they become profitable.
The lesson, not just for investing in SpaceX, but for investing at large is that when investors steer away from fundamentals, the investment results become increasingly unreliable.
Related: Navellier to SpaceX buyers: wait for escape velocity
Source
Originally published at www.thestreet.com.
