Thursday, 19 September 2024
by BD Banks
Computer memory has been a lucrative business for decades, and Micron Technology (NASDAQ: MU) was always an important supplier of those crucial chips. The company was formed in 1978, made its first memory chip in 1981, and entered the public stock market in 1984.
Micron soared over the next 20 years. It developed many industry standards and supplied chips to game-changing devices such as home computers in the 1980s and consumer electronics in the 1990s. Along the way, it acquired memory manufacturing operations from technology giants such as Texas Instruments and Toshiba.
Micron’s stock soared in those giddy days, so the company executed three stock splits between 1994 and 2000. The last one was a 2-for-1 split in the spring of 2000, about two months before the dot-com bubble popped.
Here’s how a single Micron share from before the spring of 1994 evolved into 10 shares in a modern portfolio:
|
Stock Split Date |
Split Ratio |
Total Number of Shares (Starting from 1 share in 1984-1993) |
|---|---|---|
|
April 1994 |
5-for-2 |
2.5 |
|
May 1995 |
2-for-1 |
5 |
|
May 2000 |
2-for-1 |
10 |
Data found and confirmed at Yahoo! Finance and YCharts. Table by author.
The original investment in this case was worth about $25 near Micron’s market debut. Today, the 10 post-split shares add up to roughly $880. That’s a market-beating 3,450% gain in 30 years.
Like many of its tech-sector peers, Micron would not revisit the 2000 peak prices for a couple of decades. The painful experience of splitting just before a massive market crash 22 years ago makes Micron less likely to reach for the share-splitting scissors any time soon.
That being said, Micron broke through that invisible barrier recently. The artificial intelligence (AI) boom should give the stock another push. The shares are still inexpensive in terms of price per share, so investors aren’t exactly clamoring for an immediate stock split. Ask again if and when Micron’s share price climbs closer to $1,000 than $100 per share — which should take years, even in a persistent bull market.
Before you buy stock in Micron Technology, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Micron Technology wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $708,348!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of September 16, 2024
Anders Bylund has positions in Micron Technology. The Motley Fool has positions in and recommends Texas Instruments. The Motley Fool has a disclosure policy.