Micron stock dropped 28% due to tech pullback, but long-term outlook remains positive.

From Nasdaq: 2025-04-23 08:55:00

Micron Technology, Inc. (MU) shares have dropped 27.8% in the last month, underperforming the Computer and Technology sector and major semiconductor players like Broadcom, NVIDIA, and AMD. Despite short-term challenges, MU’s long-term growth story remains strong, making it a stock worth holding onto.

The recent slump in Micron’s stock is due to a larger tech pullback driven by fears of a tariff war and slowing economic growth. The company’s gross margin has deteriorated, with a decline to 37.9% in the second quarter of fiscal 2025. Micron’s margin outlook remains weak, but its dominant market position and long-term outlook are positive.

Micron’s long-term outlook is promising, with potential year-over-year revenue growth of 29% and a 153% increase in EPS for the third quarter. The company has a history of beating earnings estimates and is well-positioned in the memory and storage chip market, especially for AI workloads.

Positive industry trends, such as increased demand for memory solutions in AI, data center, automotive, and industrial IoT sectors, benefit Micron. The company’s diversification strategy and investments in cutting-edge technologies ensure competitiveness. Micron’s undervaluation and strong positioning in high-bandwidth memory products make it a compelling long-term investment.

Micron’s stock valuation is lower than its sector peers, with a forward 12-month P/S ratio of 1.86X compared to the sector’s 5.06X. Despite short-term headwinds, holding onto Micron for its strong market position in AI and data center markets, along with an attractive valuation, is recommended. The Zacks Rank #3 (Hold) stock remains a prudent choice for investors.



Read more at Nasdaq: Micron Stock Plunges 28% in a Month: Should You Hold or Exit?