Micron Technology (NASDAQ: MU) is no stranger to volatility, but its recent price action has been brutal even by semiconductor standards. Since peaking in June of last year, the stock has tumbled 42%. And nearly 30% of that decline happened in just the past month.
So, is this a falling knife or an undervalued gem in the chip sector?
Key Points
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Despite a 42% stock drop, Micron’s revenue is up 70% YoY with steady earnings growth and solid forward projections.
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A $6.1B CHIPS Act grant boosts Micron’s domestic footprint—key amid rising tariff risks.
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Trading at 17x earnings, analysts see 80% upside, supported by a strong balance sheet and modest dividend.
Ignore the Stock Chart, Look at the Business
Despite the ugly share price performance, Micron’s business has been quietly firing on all cylinders.
Revenue has increased year-over-year for six straight quarters, capped by a 70% surge over the trailing 12 months to $31.3 billion. And while earnings have bounced around, the company has moved solidly back into the black after a rough patch in 2023 and early 2024.
In its fiscal Q2 2025 (ended February), Micron brought in $8.05 billion in revenue. That’s down slightly from the $8.71 billion the prior quarter but still a huge jump from the $5.82 billion it earned a year earlier. EPS came in at $1.41, down sequentially from $1.67 but nearly double the $0.71 posted last year.
Looking ahead, Micron expects Q3 revenue of around $8.80 billion with EPS around $1.37. While growth may be cooling, analysts still forecast long-term EPS to increase at a 7.6% annual clip over the next three to five years.
Micron’s Secret Weapon Is Made in the USA
Yes, every chipmaker has benefited from the AI-driven data center boom but Micron has something many of its peers lack, a deep-rooted manufacturing presence on U.S. soil.
For over 20 years, the company has been making memory chips in Virginia. And with a new $6.1 billion CHIPS Act grant, Micron is doubling down and building out operations in Idaho and New York as well as planning $125 billion in domestic semiconductor investment over the coming decades.
While many chipmakers are just beginning to re-shore their manufacturing, Micron is already there and with a head start that could prove critical. Especially now.
Former President Donald Trump has hinted at sweeping new tariffs on foreign-made semiconductors. While Micron does have overseas production, its U.S. manufacturing base gives it a cushion most competitors don’t have.
Undervalued and Hiding in Plain Sight?
Thanks to the selloff, Micron is now trading at just 17x earnings, 2.6x sales, and 1.6x book value. That’s a pretty compelling valuation for a company with this kind of revenue growth and domestic manufacturing tailwind.
Micron even pays a dividend, albeit a modest one. The current yield sits at 0.7%, with the company paying $0.46 per share annually. The payout hasn’t grown since mid-2022, but with just 11.1% of earnings allocated to dividends, there’s room for increases, eventually.
Should You Buy Micron Now?
Wall Street thinks there’s plenty of upside. The average analyst price target sits at $128.34, an eye-popping 80% higher than where shares recently traded.
Yes, there are real risks. Demand for memory chips is softening, and a potential slowdown in AI infrastructure spending could take a bite out of near-term growth. Pricing pressure may linger.
But Micron’s balance sheet is healthy, with $24.7 billion in current assets and just $7.9 billion in liabilities. And if trade tensions flare up, its U.S. production footprint could be a key advantage.
Micron may still be facing headwinds, but after a 42% drawdown, the upside potential might finally outweigh the risk. For long-term investors with an appetite for volatility, MU could be one of the more compelling chip plays on the market right now.