Micron (MU) Plunges 29% in a Month: Should You Buy the Dip?

Company Overview - Micron Technology, Inc. has experienced a significant stock decline of nearly 29% in the past month, which is more severe than the S&P 500's drop of 5.9% and the Zacks Computer and Technology sector's decline of 11% [1] - The stock price closed at $93.08 on August 9, approximately 41% below its 52-week high of $157.54 reached on June 18 [1] Industry Trends - Despite the stock decline, Micron is positioned well in the growing memory chip industry, particularly for GPU-enabled AI servers, driven by the demand for advanced memory solutions due to the integration of generative AI and large language models in data centers [4] - The memory chip industry has seen improved supply-demand balance, leading to better pricing for Micron's DRAM and NAND products, which is expected to support the company's financial performance [4] Product Portfolio and Partnerships - Micron's diversified product lineup, including DRAM and NAND offerings for PCs, servers, and smartphones, provides a competitive advantage and helps secure new deals [5] - The next-generation GDDR7 graphics memory is being tested by AMD and Cadence Design Systems, indicating strong partnerships and product innovation [5] - Micron's HBM3E memory is integral to NVIDIA's upcoming AI chip, the H200, with significant portions of its 2024 and 2025 supply already allocated [6] Financial Performance - Micron has shown a strong recovery from previous financial difficulties, consistently outperforming earnings expectations in recent quarters, with an average surprise of 73.2% [7] - For fiscal 2025, revenues are projected to grow by approximately 55% to $38.63 billion, and earnings are expected to increase more than eightfold to $9.32 per share, reflecting positive sentiment around the stock [7] Investment Outlook - The recent stock decline may present a buying opportunity for investors who believe in the long-term growth potential of the tech industry, particularly given Micron's role in AI and its strong product portfolio [8] - With a Zacks Rank 2 (Buy) and a Growth Score of B, Micron is considered to offer solid investment potential for tech-focused portfolios [8]