Micron Technology (NASDAQ: MU) saw its shares rise by 1.1% on Thursday, outperforming the broader market which experienced a downturn. The Nasdaq Composite lost 0.8% and the S&P 500 shed 0.6% as of the latest update. Micron’s stock was still up 0.5% as of 1:41 p.m. ET.
The reason behind Micron’s gains was the announcement that the company would be receiving up to $13 billion in loans and subsidies from the CHIPS Act. This program aims to revitalize the semiconductor industry in the U.S. Micron, a key player in memory and storage chips, will receive $6.1 billion in federal grants to support the construction of two fabrication facilities in New York and Idaho. Additionally, the company will receive $7.5 billion in loans for these projects.
In return for the funds, Micron has committed to investing $125 billion in the two states over the next 20 years to develop a cutting-edge memory manufacturing ecosystem. Apart from the CHIPS Act funds, Micron will also benefit from the investment tax credit and incentives from the state of New York.
Micron is the fourth chipmaker to receive funds under the program, following Intel, Taiwan Semiconductor Manufacturing, and Samsung. Despite its strategic opportunity, Micron’s stock is trading at less than 4x next year’s sales, making it an attractive investment compared to the broader market.
Investors looking for potential growth opportunities should consider the recommendations from the Motley Fool Stock Advisor team, which has a track record of identifying top-performing stocks. While Micron may not be on their current list, other stocks recommended by the team have produced significant returns in the past. The Stock Advisor service has outperformed the S&P 500 since 2002, providing investors with valuable insights and stock picks to build a successful portfolio.
In conclusion, Micron Technology’s positive performance amid a market downturn highlights its potential for growth with the support of the CHIPS Act funding. Investors should weigh the opportunities presented by Micron’s strategic investments and consider the recommendations from reputable sources like the Motley Fool Stock Advisor for long-term success in the stock market.