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Micron reported absolutely fantastic results after the stock markets closed yesterday and yet the stock price is down almost 4% today after reporting these remarkable results. Now there were some reasons for concern for investors including the fact that most of the performance was a result of price increases rather than unit growth, but still I thought Micron had its Nvidia moment.
That moment when Nvidia's revenue soared and it provided forecasts that from this point onward our revenue will remain really really high levels going forward. But still the stock price didn't react positively for Micron. So I'm going to share with you the details of the most recently completed quarter and my update on Micron stock.
Remember, I've had this stock rated as a buy for over a year now and the stock price is up significantly several hundred percent since I rated the stock a buy. It's been one of my better recommendations over the previous year or two years. So I'm going to update that recommendation, let you know what I think about the stock following the reaction after these remarkable result AI evolves, they expect computer architectures to become more memory intensive.
And I agree based on the direction we're seeing the AI market go towards, it's increasingly relying on memory and memory is becoming an increasing part of the infrastructure, right? First it was the GPU pioneered by Nvidia that took center stage as the most important component in this data center and now memory is growing in importance.
Of course, I'm not saying that it's overtaking the GPU in importance, but it's up there now. It's up there competing with the GPU and the CPU in importance in this critically important supply chain where companies are spending hundreds of billions of dollars trying to improve. So this puts Micron in a structurally more important position in a category that's new, right?
Previously Micron and the data center, it wasn't the large part of its business. Its business was more focused on smartphones and computers. But now the data center has become the dominant driver of Micron's performance and Micron has a dominant position in this industry that's continuing to grow. So overall I thought Micron delivered an excellent quarter and I thought management did a great job of elaborating on the reasons transparently to investors for their success.
Now I also understand the stock price decrease because there were some factors that were concerning and I'm going to have more videos coming out to go through each one of those factors rather than make one extremely long video covering everything. I've split it up into several videos going through Micron's earnings results and highlighting specifically what went on and providing analysis on each one of those factors.
But overall, I updated my intrinsic value per share calculation and it increased significantly. I now value Micron's share price or fair value at $488. The current market price is $442. So on my proprietary DCF basis it looks undervalued and it also looks undervalued if you look at it on the forward price to earnings basis.
It's trading in the low double digits, very cheap in my opinion and it's incorporating those concerns from investors. It's a cyclical business, it's near peak demand right now and investors are not paying for this continuation of this level of demand. So I mentioned I've had Micron stock rated as a buy for over a year now and after these results and seeing the price move lower rather than move higher, Micron looks like an even better opportunity for investors.
So today I upgraded Micron to one of the top 15 stocks you can buy right now. Of course, risk needs to be considered along with the reward, but I've incorporated that into my thinking here. The risk is elevated, but the potential reward is elevated much more and so I see this as an attractive opportunity for long-term investors.
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