Micron (MU +6.10%) stock defied today's market sell-off to jump 3.5% through 3:40 p.m. -- and for a reason that may surprise you.
In a note earlier this week, Canadian private equity shop Lynx Equity told investors that even though the SpaceX (SPCX -1.20%) IPO is over, and even after the space company's shares are up 28% from Monday's opening price, there's still a way for investors to make money on the SpaceX IPO: by buying Micron (MU +6.10%) stock.
Image source: Micron.
SpaceX is flush with cash now
SpaceX made history last week, both scoring a gigantic valuation (currently $2.5 trillion -- quite a lot for a space stock with no profits) and raising $80 billion in cash.
Next, SpaceX must figure out how to deploy all this cash to keep its growth going. Lynx thinks SpaceX will spend quite a lot of this cash on semiconductors.
While still mostly thought of as a "space company," the tech giant that IPO'ed last week is actually more of an AI stock -- as SpaceX demonstrated yesterday when it splashed out $60 billion in stock to buy Cursor. In time, some investors believe SpaceX's AI business could be worth $30 trillion annually.
NASDAQ: MU
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What this means for Micron
For SpaceX to come anywhere near fulfilling this dream, however, it's going to need to build a huge AI business -- and spend heavily on AI chips and the memory chips that support AI inference work.
This means more money flowing to Nvidia (NVDA +0.84%), for example (which is in fact Lynx's favorite play on SpaceX), and also more money flowing to Micron (MU +6.10%) as well.
The best news of all? Even valued at 20x sales after this year's run-up, Micron stock is still 6x cheaper than SpaceX!
