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It didn’t take all too long for shares of memory chip titan Micron (NASDAQ:MU | MU Price Prediction) to bounce back from a brief plunge into bear market territory. For a while, it seemed like the massive past-year winner was about to give back some of 2025’s big gains as well, as the name shed just north of 30% of its value. With the stock regaining close to two-thirds of the ground lost in March, sights seem to be set on new all-time highs.
The memory supercycle is the real deal, and despite the initial scare from Google’s TurboQuant breakthrough, which meaningfully improves the memory usage efficiency of large language models (LLMs), Micron seems to be back to where it was before volatility worked its way into the stock.
Moving ahead, many bulls are continuing to pound the table, as the current multiple may still underestimate the magnitude of the memory supercycle. And, of course, a “DeepSeek Moment” for memory, like the one Google served up, might actually be another boon for Micron, given that greater efficiencies tend to lead to even higher usage.
The stock is cheap, and the earnings are real
Any way you look at it, there’s not enough high-performance memory to go around. And until there is, it might be tough to bet against the semiconductor titan as it continues to make the most of a once-in-a-generation kind of opportunity that very few firms are fortunate enough to have a front-row seat to.
While much of Wall Street has its sights set on $600, even $700 per share, for the year ahead, I personally would not be so quick to chase the name after the latest bounce. I was quite surprised to see how swiftly shares of Micron recovered from what appeared to be a devastating blow in the second half of March.
Though I’m not outright bearish on the name, especially with shares trading at a very reasonable 19.8 times trailing price-to-earnings (P/E), which doesn’t seem to make a lot of sense given the memory supercycle could span some number of years longer, especially if AI CapEx has room for raises going into 2027, I do think the name is becoming quite overbought.
Have shares bounced too fast?
Of course, passing on shares after a nearly 12% gain in one week could mean missing out on a run to $500 and beyond. The current Street-high price target seems to be set at a whopping $700, which is more than 66% from here. As the record cash flows keep flowing in, while the memory chip backlogs move further out, it’s not only difficult to be a bear, but it’s potentially dangerous, especially if you’re inclined to place a bet on a reversal.
Going against the momentum definitely isn’t the move, even if you think innovations like TurboQuant will go against Jevons Paradox, which suggests increased appetite for memory due to higher efficiency-driven usage. In short, Micron has been sold out for quite some time, and all the while, the consumer market has only grown hungrier.
Could pent-up demand from the consumer side, alongside potentially underestimated data center demand, lead to a scenario where Micron’s golden era spans another half of a decade? At this juncture, I wouldn’t expect supply to catch up until 2029. Perhaps TurboQuant could push that to 2030. Time will tell.
Why Micron’s recent volatility surge has me sidelined, at least for now
Despite the explosive upside potential and enviable outlook for the next few years, my concern is what happens if Micron stock suddenly consolidates like Nvidia (NASDAQ:NVDA) has, where even bullish developments don’t lead to moves higher.
Could it be that some investors are becoming overly skeptical over those super-low P/E multiples, which might be too cheap to be true for some?
I suppose it’s possible. In any case, the recent pick-up in volatility certainly makes it harder for the easily rattled to hop aboard, no matter how pristine the fundamentals. The 1.61 beta is quite elevated, and if the recent software volatility spreads to hardware, there might be another shot to buy Micron at a double-digit percentage discount to its highs. I’ll certainly be waiting.
Either way, I wouldn’t be surprised if a lengthy digestion phase is in the cards after the latest bounce above $420 per share. Of course, I could be wrong, and the bulls might be right to treat the latest volatility as an entry point before the next leg higher.
