Micron Technology (MU) reported a solid first-quarter earnings report with a 85% year-over-year surge in revenue driven by its growing data center business and AI adoption. However, the company’s shares have plummeted 18% since the release, nearing a 52-week low.
The sell-off is largely attributed to Micron’s weaker-than-expected financial guidance for Q2, with revenue forecasts of $7.9 billion and earnings per share (EPS) at $1.23. This compares unfavorably to Wall Street’s expectations of $8.9 billion in revenue and $1.97 in EPS.
Despite the disappointing near-term forecast, analysts are encouraged by Micron’s long-term prospects. If the company achieves its Q2 guidance, it would imply a 36% year-over-year growth rate in revenue and 73% year-over-year growth in EPS. These figures suggest that Micron is poised for significant expansion in its storage and memory chip business.
As AI adoption continues to grow, Micron finds itself well-positioned to capitalize on the demand for enhanced chip ware. With new GPUs from leading companies like Nvidia, AMD, Amazon, Alphabet, Microsoft, and Meta Platforms entering the market, Micron’s valuation appears undervalued compared to its peers.
With a forward price-to-earnings (P/E) multiple of 12, Micron is trading at its lowest levels in over a year. Considering these factors, the sell-off in Micron stock appears unwarranted, and it presents an attractive opportunity for investors to buy the dip and hold for the long run.
Source: https://www.fool.com/investing/2025/01/03/should-you-buy-the-dip-in-micron-stock-right-now