Andrew Arons Sees MU Growth Opportunity, IBM Value Play in “Early” AI Days

those other telecoms move lower. That's Alex Coffey co-host of next and inv here on the network. Do you want to welcome in Andrew Aarons, the founder pay Management Group? Andrew great to have you on. We've got a nice positive move to the upside to close out the week so far. And you say you remain bu on the market through year end. You believe that the rally confirms that enterprise AI demand is real. But I have sk. In the wake of the Financial Times report thatgot yesterday about open AI, that led to some pretty scant market reaction in terms of a potential discrepancy in their revenue rep. How are you looking at that as it plays into your bull market thesis through year end? Yeah, I mean, really there's a lot of discrepancy about revenue and what's going to happen going forward. But I mean, it still looks like we're very, very early here in AI, as everyone knows. And and, you know, it sth, should do very, very well. A lot of mtill coming in. And a lot of these companies earnings are, you know, are spectacular. And I think that e e that as the market progresses here. And what's your strategy then if that's our setup. Are buying these intermittent dips. Are you watching the rotation clo and buying into some of the rotation. How are you approaching the market? Andrew. Well, you know, right now we're seeing a lot of money obviously going into tech rig now. And we're seeing some of the stocks in the S&P that are really not doing that great. But there are some stocks that look very,y cheap to me. And you know I pointed out today that a couple that look like kind of bargains here to me are IBM and Home Depot. So IBM and Depot. What do you like about them? I mean, obviously not in the same space. And we have seen even sentiment coming out today. We're seeing the consumer under considerable amount at least. They're saying they feel they're under considerablet of pressure. And home renovations usually one of the first to go. So are you looking at Home Depot? Well, you know, I think that Home Depot, a lot of this, you know, soft housing market with the higher rates is already baked into the stock price. Stock has, you know, sold off pretty much 20%, you know, year. And the valuation looks, you know, like there'strem upsie seeing a lot of earnings revisions and there's still a lot of building going on. I mean't know everywhere I go I've been traveling a lot here and seeing bg everywhere. And it looks like, you know they're still domwith . And they're paying a 3.15 dividend right here in the market just to hold i And you know, when you get Home Depot cheap, it's usually a good time to buy it here. And right where it's trading right now on the charts looks like a really good area. And we saw a little bit of a move yesterday. And I continue to think we're going to see thick move up as we move into the final stretch of the year here. And is this a long term hold forou, , or are you just cautiously watching. Because I mean you highlighted their pro business and that has really given them a competitive advantage. It's been offsetting some of the losses they've seen more from the the do it yourself consumer. But how long are you willing to wait on Home Depot to see if we actually get any sort of sustainable turnaround here earnings? Yeah, I mean, I, I don't think this is I do think Home Depot is a long term hold here, but I do think getting into this stock right now, I think people are going to be rewarded pretty nicely over the next 6 to 9 months. All right. So then let's look at IBM obviously a part of the AI trade h But it's well below its 52 week high. So is this a opportunity for you. Yeah. I mean I've been watching and recommending it here. And you know we've got it's been vos going on in quantum. But they have a strong AI book at 12.5 billion. They're trading0% off their 52 week high. We have earnings coming up in a few weeks. They're shifting their focus more to lucrative business areas. And they're helping traditional businesses adapt safely to the A enterprise software. I think, knr earnings last quarter, I think people didn't like necessarily what they heard, but I think they may surprise, in my opinion. And we could see the stock move up quite handsomely. And IBM also has a dividend yield above 3%. Is that a part of why you like it as well, or are you just s meaningful upside potential for earnings growth. Well, I really see meaningful upside potential here. But don't forget that IBM has increased their dividend for the past 31 years. All right. So then's look at micron. We saw micron moving lower yesterday under some pressure caught up in this broader AI conversation. Certainly a very different investment from IBM and Home Depot. They had their very strong earnings report. They bucked their I think it was four quarter trend of moving to the downside dous after what were arguably great earnings. What'sg yo confidence that that can become the trend?ell, you know, I think that there is a slight possibility that some of these other memory chip stocks are in the market. The valuations just seem very, very, very attractive to me. You know, there I know t they're up a tremendous amount, but I still think that they possibly be one of the big winners, you know, in the inpcomin years here because, you know, the way that AI is goiy are the backbone. They're sold out of all these memory chips. And I they're going to benefit immensely from this AI PC refresh. We're going toee. And they're sitting with 68.3 billion in net cash. Think about how much this company is growin what's, you know, what the possibilities are in the future here. And there's a lot of momentum in micron. There is volatility. I'm not saying that it's going to go straight up.ut I do think that you know we're we're approaching a good area here on the chart where we may see this stoc t off before the end of the year. All right. I mean we'veinly seen it take off already too. I mean just looking over the last year up 432% for micron. Even with those pullbacks that we talked there. Andrew always great to talk to you. Appreciate you taking the time on your Friday.