1 week ago
15
David Jagielski, CPA, The Motley Fool
Mon, April 13, 2026 astatine 11:20 AM CDT 3 min read
It tin astir look excessively bully to beryllium existent that a banal that's been flying arsenic precocious arsenic Micron Technology (NASDAQ: MU) implicit the past twelvemonth could inactive beryllium cheap. In the past 12 months, it's up astir 500%, which is simply a genuinely staggering instrumentality erstwhile you see that the S&P 500 has risen by conscionable 27% implicit that aforesaid clip frame. And yet, the banal trades astatine conscionable seven times its expected aboriginal earnings.
What's going connected with Micron's stock? Is it truly this inexpensive a buy? While it's existent that it is cheap, investors request to besides recognize wherefore that is the case, and wherefore that could alteration successful the future.
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Micron's banal trades astatine a guardant price-to-earnings (P/E) aggregate of seven, which mightiness marque it a compelling bargain close now. Earnings for the representation and retention institution person been rising rapidly owed to beardown demand. And with spending connected tech apt to stay precocious arsenic a effect of artificial quality (AI), it tin look to beryllium a no-brainer buy.
The occupation is that the P/E aggregate successful Micron's lawsuit whitethorn not beryllium terribly utile these days. The institution is so experiencing a boom, and request is truthful beardown that representation and retention prices are rising. That means that not lone is Micron selling much products, but it's besides selling them astatine higher prices. Analysts inactive spot a shortage successful the twelvemonth ahead, which is wherefore adjacent connected a guardant basis, the banal inactive looks cheap.
But arsenic the concern changes and proviso catches up to request and prices travel down, past this seemingly inexpensive banal whitethorn abruptly commencement to look expensive. Micron whitethorn beryllium a large sanction successful the industry, but there's besides plentifulness of competition. And fixed the breathtaking opportunities successful AI these days, that whitethorn intensify successful the future. It could pb to leaner nett maturation for Micron, oregon adjacent a decline, making the banal little compelling to buy.
Shares of Micron are up 45% this year, and analysts stay bullish connected the stock, with 33 retired of 37 standing it a buy. But the statement expert terms people is astir $465, implying a near-term upside of conscionable 13% from wherever it trades today. Meanwhile, successful the longer term, it whitethorn beryllium susceptible to a correction if its maturation complaint slows down.
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