Jim Cramer's charitable foundation is paving the way into shares of the American memory chip manufacturer Micron Technology, CNBC reports. The organization is acquiring 25 shares of the company at approximately $872 each, resulting in a 0.5% stake in the portfolio. Due to the high volatility of these shares in the market, the position is being formed with a small volume at the initial stage.
Against the backdrop of an artificial intelligence boom, demand for DRAM and NAND memory chips has significantly exceeded supply, leading to price increases and higher profitability for Micron. Despite strong fundamental indicators, the company's shares are trading at a low price-to-earnings ratio due to long-standing investor concerns about the cyclical nature of the business.
To change its business model and reduce risks, the company is actively signing strategic contracts with major customers, establishing maximum and minimum price thresholds. Micron's Executive Vice President, Sumit Sadanan, noted that a larger market deficit is expected in 2027 as demand continues to grow faster than supply.
The global market for memory semiconductors is primarily dominated by three major corporations: South Korea's Samsung Electronics and SK Hynix, as well as America's Micron.
The target price for the newly acquired shares in the foundation's portfolio has been set at $1100 per share, which is lower than the historical maximum closing price of $1213.56 recorded on June 25.
