Micron Technology's Pullback Seen as Prime Buying Opportunity
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 hours ago
0mins
Should l Buy MU?
Source: seekingalpha
- Investment Opportunity: Paul Meeks, head of technology research at Freedom Capital Markets, believes that the recent pullback in Micron Technology (MU) shares presents an excellent buying opportunity, despite ongoing concerns about peak earnings.
- Strong Earnings Report: Micron's latest quarterly results forecast nearly $20 per share for the next quarter, a significant increase from its previous peak of $11.50 per share in fiscal 2018, showcasing the company's best performance since going public in 1984.
- AI-Driven Growth: Meeks highlights that while the memory chip industry is historically cyclical, the rise of artificial intelligence provides a multi-year growth runway, especially as the industry shifts from training large models to inference, which will substantially increase demand.
- Misguided Market Reaction: Meeks argues that the market underestimates the durability of AI infrastructure spending, characterizing the current stock markdown as “wrong weakness,” suggesting that investors should view this pullback as an attractive entry point.
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Analyst Views on MU
Wall Street analysts forecast MU stock price to fall
26 Analyst Rating
24 Buy
2 Hold
0 Sell
Strong Buy
Current: 461.730
Low
235.00
Averages
336.12
High
500.00
Current: 461.730
Low
235.00
Averages
336.12
High
500.00
About MU
Micron Technology, Inc. provides memory and storage solutions. The Company delivers a portfolio of high-performance dynamic random-access memory (DRAM), NAND, and NOR memory and storage products through its Micron and Crucial brands. The Company's products enable advancing in artificial intelligence (AI) and compute-intensive applications. Its segments include Compute and Networking Business Unit (CNBU), Mobile Business Unit (MBU), Embedded Business Unit (EBU), and Storage Business Unit (SBU). CNBU segment includes memory products and solutions sold into the data center, PC, graphics, and networking markets. MBU segment includes memory and storage products sold into the smartphone and other mobile-device markets. EBU segment includes memory and storage products and solutions sold into the intelligent edge through the automotive, industrial, and consumer embedded markets. SBU segment includes SSDs and component-level storage solutions sold into the data center, PC, and consumer markets.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Optimistic Earnings Outlook: Micron Technology (MU) shares rose about 2% on Wednesday as the market anticipates strong second-quarter results, reflecting ongoing demand growth for AI infrastructure, which could further boost the company's stock price.
- Active Options Trading: Options traders are positioning for significant post-earnings swings in Micron's shares, with the March 20 expiration chain indicating market expectations for an upside surprise, suggesting investor optimism about the company's future performance that may influence stock movements.
- Overall Market Decline: Despite Micron's stock increase, the Nasdaq Composite and S&P 500 indices both fell around 0.6%, while the Dow Jones dropped nearly 0.9%, as major averages ended a two-day winning streak following higher-than-expected U.S. Producer Price Index data, indicating market sensitivity to economic indicators.
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- Significant Revenue Growth: In its fiscal year ending August 28, 2025, Micron reported revenue of $37.4 billion, more than double the $15.5 billion from two years prior, indicating robust business growth potential, particularly as rising prices due to memory and storage shortages are expected to drive further expansion.
- Valuation Challenges: Despite the optimistic outlook, Micron's current trailing P/E ratio stands at 44, which may deter investors if spending slows down, leading to potential adjustments in the premium they are willing to pay for Micron's stock.
- Long-Term Outlook: While Micron has the potential to reach a $1 trillion valuation in the long run, it is unlikely to happen soon; investors should proceed with caution, especially given the risk of a sharp decline if signs of a pullback in tech spending emerge.
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- Profit Growth: Gross margin soared from 36.8% to 74.4%, with net income skyrocketing 771% to $13.8 billion, translating to earnings per share of $12.07, while adjusted EPS hit $12.20, well above the consensus estimate of $8.65, reflecting the company's robust pricing power in the memory market.
- Optimistic Outlook: Micron forecasts Q3 revenue of approximately $33.5 billion, up 260% year-over-year, with gross margin expected to rise to 81%, showcasing strong confidence in future memory demand despite market concerns about potential margin peaks.
- Capital Expenditure Plans: To capitalize on the AI boom, Micron plans to invest over $25 billion this year, including the acquisition of a manufacturing facility in Taiwan, indicating the company's long-term optimism about the AI market and its commitment to significantly ramping up production by 2027.
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- Strong US Economic Data: Despite initial jobless claims unexpectedly falling to 205,000, indicating a robust labor market, January new home sales plummeted 17.6% to 587,000, below expectations, reflecting weakness in the housing market that may affect future economic growth.
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- Revenue Surge: Micron's revenue soared by 196% year-over-year to $23.9 billion, significantly surpassing the market expectation of $19.2 billion, indicating that soaring AI demand and supply constraints are driving up memory chip prices; however, the stock fell 3% post-earnings, reflecting investor skepticism about long-term growth.
- Profit Growth: Micron's net income skyrocketed by 771% to $13.8 billion, with earnings per share reaching $12.07, and adjusted EPS at $12.20, far exceeding the consensus estimate of $8.65, showcasing the company's robust profitability in the memory market.
- Optimistic Outlook: The company forecasts revenue of around $33.5 billion for the next fiscal quarter, a 260% increase, with gross margins expected to rise to 81%, indicating strong confidence in future memory demand, despite ongoing concerns about the memory cycle.
- Capital Expenditure Plans: To capitalize on the AI boom, Micron plans to invest over $25 billion in 2023, including the acquisition of a manufacturing facility in Taiwan, demonstrating the company's strong commitment to future growth despite cyclical risks.
See More
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- Optimistic Earnings Outlook: Micron Technology (MU) shares rose about 2% on Wednesday as the market anticipates strong second-quarter results, reflecting ongoing demand growth for AI infrastructure, which could further boost the company's stock price.
- Active Options Trading: Options traders are positioning for significant post-earnings swings in Micron's shares, with the March 20 expiration chain indicating market expectations for an upside surprise, suggesting investor optimism about the company's future performance that may influence stock movements.
- Overall Market Decline: Despite Micron's stock increase, the Nasdaq Composite and S&P 500 indices both fell around 0.6%, while the Dow Jones dropped nearly 0.9%, as major averages ended a two-day winning streak following higher-than-expected U.S. Producer Price Index data, indicating market sensitivity to economic indicators.
- Diverse Stock Performance: During the OFC conference, Lumentum (LITE) shares surged about 9%, while other AI and networking-related stocks like Applied Optoelectronics (AAOI) also rose around 9%, reflecting sustained market interest and investment enthusiasm in AI technologies, potentially providing long-term growth opportunities for related companies.
See More
Micron Technology's Stock Soars 360% with Massive Growth Potential
- Surging Demand: As companies invest heavily in AI and infrastructure, demand for memory and storage solutions has skyrocketed, leading to a 360% increase in Micron Technology's stock over the past 12 months, with its market cap nearing $530 billion, positioning it among the largest tech companies globally.
- Significant Revenue Growth: In its fiscal year ending August 28, 2025, Micron reported revenue of $37.4 billion, more than double the $15.5 billion from two years prior, indicating robust business growth potential, particularly as rising prices due to memory and storage shortages are expected to drive further expansion.
- Valuation Challenges: Despite the optimistic outlook, Micron's current trailing P/E ratio stands at 44, which may deter investors if spending slows down, leading to potential adjustments in the premium they are willing to pay for Micron's stock.
- Long-Term Outlook: While Micron has the potential to reach a $1 trillion valuation in the long run, it is unlikely to happen soon; investors should proceed with caution, especially given the risk of a sharp decline if signs of a pullback in tech spending emerge.
See More
Micron Reports Blockbuster Earnings with 196% Revenue Surge
- Revenue Surge: Micron's Q2 revenue reached $23.9 billion, a staggering 196% increase year-over-year, significantly surpassing the market expectation of $19.2 billion, indicating strong demand driven by AI and supply constraints pushing memory chip prices higher, thereby reinforcing its market leadership.
- Profit Growth: Gross margin soared from 36.8% to 74.4%, with net income skyrocketing 771% to $13.8 billion, translating to earnings per share of $12.07, while adjusted EPS hit $12.20, well above the consensus estimate of $8.65, reflecting the company's robust pricing power in the memory market.
- Optimistic Outlook: Micron forecasts Q3 revenue of approximately $33.5 billion, up 260% year-over-year, with gross margin expected to rise to 81%, showcasing strong confidence in future memory demand despite market concerns about potential margin peaks.
- Capital Expenditure Plans: To capitalize on the AI boom, Micron plans to invest over $25 billion this year, including the acquisition of a manufacturing facility in Taiwan, indicating the company's long-term optimism about the AI market and its commitment to significantly ramping up production by 2027.
See More
Global Markets Decline Amid Inflation Concerns
- Market Decline: The S&P 500 index fell by 0.43%, the Dow Jones Industrial Average by 0.59%, and the Nasdaq 100 by 0.44%, indicating a broad sell-off in global equities driven by inflation concerns and investor pessimism.
- Rising Bond Yields: Hawkish comments from the BOE, ECB, and BOJ pushed global bond yields higher, with the 10-year German Bund yield reaching a 2.25-year high of 3.01%, which will increase borrowing costs and impact corporate financing.
- Surging Energy Prices: European natural gas prices surged over 12% to a three-year high due to escalating conflict in Iran, with Qatar reporting a 17% damage to its LNG export capacity, raising inflation risks and potentially disrupting global energy supplies.
- Strong US Economic Data: Despite initial jobless claims unexpectedly falling to 205,000, indicating a robust labor market, January new home sales plummeted 17.6% to 587,000, below expectations, reflecting weakness in the housing market that may affect future economic growth.
See More
Micron Reports Surging Earnings but Stock Falls Post-Results
- Revenue Surge: Micron's revenue soared by 196% year-over-year to $23.9 billion, significantly surpassing the market expectation of $19.2 billion, indicating that soaring AI demand and supply constraints are driving up memory chip prices; however, the stock fell 3% post-earnings, reflecting investor skepticism about long-term growth.
- Profit Growth: Micron's net income skyrocketed by 771% to $13.8 billion, with earnings per share reaching $12.07, and adjusted EPS at $12.20, far exceeding the consensus estimate of $8.65, showcasing the company's robust profitability in the memory market.
- Optimistic Outlook: The company forecasts revenue of around $33.5 billion for the next fiscal quarter, a 260% increase, with gross margins expected to rise to 81%, indicating strong confidence in future memory demand, despite ongoing concerns about the memory cycle.
- Capital Expenditure Plans: To capitalize on the AI boom, Micron plans to invest over $25 billion in 2023, including the acquisition of a manufacturing facility in Taiwan, demonstrating the company's strong commitment to future growth despite cyclical risks.
See More
Stocks Decline as Oil Prices Surge Following Iran's Attack
- Oil Price Surge Impact: Stocks fell as Brent crude briefly hit $119 per barrel following Iran's attack on a key LNG facility in Qatar, causing the S&P 500 to slip below its 200-day moving average for the first time since last May, raising concerns among long-term investors.
- Eli Lilly Drug Study Update: Eli Lilly reported that its Phase 3 study of retatrutide for type 2 diabetes showed superior weight loss compared to Mounjaro over 40 weeks, yet the stock remained stagnant as investors are more focused on the anticipated approval of its new GLP-1 pill next month.
- Nvidia Stock Analysis: Jim Cramer reiterated his
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